SFC Updates 2026

What Changed

This is not a regulatory change but rather an enforcement precedent establishing that: "Scaffolding" strategy is prosecutable: Repeatedly placing and cancelling trading orders at progressively higher prices constitutes false trading under section 295 of the Securities and Futures Ordinance. Wash trading across multiple accounts is actionable: Using various securities accounts to simultaneously act as both buyer and seller of shares violates false trading prohibitions. Price impact + market de

What You Need To Do

• *For brokers and licensed intermediaries
• *Enhance surveillance systems to detect scaffolding patterns (repeated placement and cancellation of orders at progressively higher prices)
• *Monitor cross-account trading to identify wash trading where the same beneficial owner trades with themselves across multiple accounts
• *Implement controls to flag suspicious trading activity that artificially impacts share prices without genuine economic purpose
• *Document compliance procedures for detecting and reporting false trading under section 295 of the Securities and Futures Ordinance

Key Dates

References

• [1] fxnewsgroup.com
• [2] fxnewsgroup.com
• [3] sfc.hk
• [4] apps.sfc.hk
• [5] caproasia.com
• [6] mas.gov.sg
• [7] wikifx.com
• [8] caproasia.com

What Changed

The SFC has successfully prosecuted a case of false trading under section 295 of the Securities and Futures Ordinance, which constitutes an offence.

What You Need To Do

• Implement or review existing controls to detect and prevent false trading, including monitoring for suspicious trading patterns such as 'scaffolding' and wash trades
• Provide training to trading staff on the risks and consequences of false trading

Key Dates

Related Regulations

What Changed

This is an enforcement action, not a new rule change, but it reinforces existing SFC circulars requiring VA products (including unauthorised funds and exchange-traded VA derivatives) to be offered exclusively to professional investors (PIs). Key requirements reiterated include: conducting VA-specific product due diligence; assessing client knowledge of VA investments; providing sufficient VA-specific information and warnings; and implementing platform controls to restrict retail access to comple

What You Need To Do

• Conduct immediate VA product due diligence using SFC-specific procedures, not just group-wide protocols, to identify unauthorised VA funds and derivatives
• Implement client knowledge assessments for VA investments before transactions, especially for retail clients
• Provide VA-specific warnings and information on platforms and ensure retail access is blocked for PI-only products
• Review and enhance online platform controls for suitability checks on complex products; audit historical VA trades for compliance gaps
• Update internal policies to align with SFC circulars on VA distribution, including staff training on breaches like those at SCMHK

Key Dates

References

• [1] apps.sfc.hk
• [2] structuredretailproducts.com
• [3] rootdata.com
• [4] binance.com
• [5] financemagnates.com
• [6] hoganlovells.com
• [7] jdsupra.com