The Securities and Futures Ordinance (SFO) empowers the Securities and Futures Commission (SFC) to oversee and regulate various aspects of the securities and futures markets in Hong Kong. A crucial element of this regulatory framework is the SFC’s authority to grant licenses to individuals and corporations engaging in regulated activities, including leveraged foreign exchange (LFX) trading. This licensing regime ensures that only those who meet stringent criteria of fitness and properness, competence, and financial soundness are permitted to operate in the market. The SFC’s power to grant licenses is complemented by its ability to impose conditions on these licenses, allowing for tailored regulation based on the specific activities and risk profiles of the licensees. These conditions may relate to financial resources, operational procedures, or the scope of permitted activities. Furthermore, the SFC has the power to revoke or suspend licenses if a licensee fails to comply with the SFO or its subsidiary legislation, or if they cease to meet the required standards of fitness and properness. This power is essential for maintaining market integrity and protecting investors from potential misconduct or financial instability. The licensing framework, coupled with the SFC’s enforcement powers, forms a cornerstone of the regulatory regime for LFX trading in Hong Kong, promoting a fair, orderly, and transparent market.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. Specifically, section 114 outlines the circumstances under which a person is considered to be carrying on a business in regulated activities. This section is crucial for determining whether an entity requires licensing from the Securities and Futures Commission (SFC). Understanding the scope of section 114 is essential for ensuring compliance with the regulatory framework for leveraged foreign exchange trading. Activities such as dealing in securities, advising on securities, and asset management fall under the regulated activities defined by the SFO. The SFO provides a comprehensive framework for regulating various aspects of the securities and futures industry, including licensing, market conduct, and investor protection. Licensed corporations and individuals must adhere to the SFO and its subsidiary legislation to maintain their licenses and operate within the legal boundaries. The SFO empowers the SFC to oversee and enforce regulations, ensuring market integrity and investor confidence. Therefore, correctly interpreting and applying section 114 is a fundamental aspect of regulatory compliance for leveraged foreign exchange traders in Hong Kong.

The Securities and Futures Ordinance (SFO) empowers the Securities and Futures Commission (SFC) to establish and enforce rules concerning the financial resources of licensed corporations. These rules, detailed in the Securities and Futures (Financial Resources) Rules (Cap 571N), are crucial for maintaining the financial stability and integrity of intermediaries operating in Hong Kong’s financial markets, particularly those engaged in leveraged foreign exchange trading. The liquid capital requirement is a key component of these rules, ensuring that licensed corporations maintain sufficient liquid assets to meet their current obligations and withstand potential financial shocks. This requirement is calculated based on a prescribed formula that considers various factors, including the corporation’s assets, liabilities, and the risks associated with its business activities. The SFC closely monitors compliance with these rules through regular reporting and on-site inspections. Failure to meet the liquid capital requirement can result in regulatory action, including suspension or revocation of the license. The paid-up share capital requirement is a separate but related requirement that focuses on the initial capitalization of the licensed corporation.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the legal framework for regulating various aspects of the industry, including leveraged foreign exchange trading. Statement I is correct because the SFO indeed provides the overarching legal structure for regulating leveraged foreign exchange trading activities in Hong Kong. Cap 571E, as mentioned in Statement II, specifically addresses exemptions related to leveraged foreign exchange trading, providing clarity on circumstances under which certain activities may be exempt from specific requirements. Statement III is incorrect because Cap 571A pertains to unsolicited calls and does not directly address financial resource requirements. Financial resource rules are typically covered under a different subsidiary legislation, such as the Securities and Futures (Financial Resources) Rules (Cap 571N). Statement IV is correct because the Securities and Futures Appeals Tribunal provides a venue for appealing regulatory decisions made by the SFC, ensuring a mechanism for review and potential redress. Therefore, the correct combination is I, II & IV only.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. Section 114 outlines the circumstances under which a person is considered to be carrying on a regulated activity. Specifically, it addresses the situation where a person actively solicits another to enter into an agreement to deal in securities, even if the agreement is executed outside of Hong Kong. This provision is crucial for maintaining market integrity and protecting investors from potentially harmful activities conducted by entities operating beyond the direct jurisdiction of Hong Kong. The SFO aims to capture activities that have a substantial connection to Hong Kong’s markets, ensuring that regulatory oversight extends to those who actively target Hong Kong investors, regardless of where the actual trading or agreement takes place. Understanding this section is vital for Leveraged Foreign Exchange Traders to ensure compliance and avoid regulatory breaches.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the regulatory framework for leveraged foreign exchange trading. Statement I is correct because the SFO defines and regulates activities related to leveraged foreign exchange trading, including licensing requirements and conduct of business rules. Statement II is incorrect because Cap 571A specifically deals with unsolicited calls, not recognized counterparties. Statement III is correct because Cap 571E provides exemptions under specific conditions for leveraged foreign exchange trading activities, such as transactions with professional investors. Statement IV is incorrect because Cap 571H pertains to client securities, not client money. Therefore, the correct combination is I & III only.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the legal framework for regulating various activities, including leveraged foreign exchange trading. Statement I is correct because the SFO does indeed define and regulate leveraged foreign exchange trading activities, setting out the requirements for licensing and conduct of business. Statement II is also correct. The Securities and Futures (Leveraged Foreign Exchange Trading) (Arbitration) Rules (Cap 571F) provide a framework for resolving disputes related to leveraged foreign exchange trading through arbitration, offering an alternative to court proceedings. Statement III is incorrect because the Securities and Futures (Client Securities) Rules and the Securities and Futures (Client Money) Rules (Cap 571H and Cap 571I respectively) are designed to protect client assets, but they are not specifically exclusive to leveraged foreign exchange trading; they apply more broadly to all licensed corporations handling client assets. Statement IV is correct. The Securities and Futures (Financial Resources) Rules (Cap 571N) prescribe the minimum financial resources that licensed corporations must maintain, including specific requirements for those engaged in leveraged foreign exchange trading, to ensure their financial stability and ability to meet their obligations. Therefore, statements I, II, and IV are correct.

The Securities and Futures Ordinance (SFO) plays a central role in regulating leveraged foreign exchange trading in Hong Kong. Statement I is correct because the SFO indeed provides the legal framework that defines and governs leveraged foreign exchange trading activities. This includes specifying which activities are regulated and setting out the requirements for those engaged in such trading. Statement II is also correct; the Securities and Futures (Leveraged Foreign Exchange Trading) (Arbitration) Rules (Cap 571F) are a crucial piece of subsidiary legislation under the SFO. These rules establish the framework for resolving disputes related to leveraged foreign exchange trading through arbitration, providing an alternative to court proceedings. Statement III is incorrect because the Securities and Futures (Client Securities) Rules (Cap 571H) and the Securities and Futures (Client Money) Rules (Cap 571I) are designed to protect client assets, but they are not specifically tailored to address the unique risks associated with leveraged foreign exchange trading. While they apply to all licensed corporations, including those dealing in leveraged foreign exchange, they are broader in scope. Statement IV is incorrect because the Hong Kong Monetary Authority (HKMA) primarily regulates banking institutions and does not directly oversee the licensing or conduct of leveraged foreign exchange traders. The Securities and Futures Commission (SFC) is the primary regulator for these activities. Therefore, the correct combination is I & II only.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the regulatory framework for various market activities, including leveraged foreign exchange trading. Statement I is correct because the SFO does indeed define and regulate leveraged foreign exchange trading, outlining the specific requirements and obligations for intermediaries engaged in this activity. Statement II is also correct. The Securities and Futures (Leveraged Foreign Exchange Trading) (Arbitration) Rules (Cap 571F) provide a framework for resolving disputes related to leveraged foreign exchange trading through arbitration, offering an alternative to traditional litigation. Statement III is incorrect as the Securities and Futures (Client Securities) Rules (Cap 571H) and the Securities and Futures (Client Money) Rules (Cap 571I) are designed to protect client assets, but they are not specific to leveraged foreign exchange trading. These rules apply broadly to all licensed corporations dealing with client assets, regardless of the specific financial product traded. Statement IV is incorrect because the Securities and Futures (Unsolicited Calls — Exclusion) Rules (Cap 571A) restricts unsolicited calls related to all securities and futures products, not just leveraged foreign exchange trading. Therefore, only statements I and II are correct.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the legal framework for regulating various aspects of the industry, including leveraged foreign exchange trading. Statement I is correct because the SFO indeed defines and regulates leveraged foreign exchange trading activities, setting out the requirements for licensing and conduct of business. Statement II is also correct; the Securities and Futures (Leveraged Foreign Exchange Trading) (Arbitration) Rules (Cap 571F) provide a framework for resolving disputes related to leveraged foreign exchange trading through arbitration, offering an alternative to court proceedings. Statement III is incorrect because the Securities and Futures (Client Securities) Rules (Cap 571H) primarily deal with the handling of client securities, not client money related to leveraged foreign exchange trading. The rules concerning client money are covered under the Securities and Futures (Client Money) Rules (Cap 571I). Statement IV is correct; the Securities and Futures (Financial Resources) Rules (Cap 571N) specify the financial resources requirements, including paid-up share capital and liquid capital, that licensed corporations engaging in leveraged foreign exchange trading must maintain to ensure their financial stability and ability to meet their obligations. Therefore, statements I, II, and IV are correct, making ‘I, II & IV only’ the correct combination.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the regulatory framework for various market activities, including leveraged foreign exchange trading. Statement I is correct because the SFO indeed provides the overarching legal structure within which leveraged foreign exchange trading is regulated. Statement II is also correct; the SFO empowers the Securities and Futures Commission (SFC) to oversee and regulate leveraged foreign exchange trading activities. This includes licensing intermediaries, setting conduct standards, and enforcing regulations. Statement III is incorrect because, while the HKMA regulates financial institutions, its direct regulatory role in leveraged foreign exchange trading is secondary to that of the SFC. The SFC is the primary regulator for leveraged foreign exchange trading, even when conducted by registered institutions. Statement IV is also correct because the SFO and its subsidiary legislation define what constitutes leveraged foreign exchange trading, distinguishing it from other financial activities and clarifying the scope of regulation. Therefore, the correct combination is I, II & IV only.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes a comprehensive regulatory framework for various market activities, including leveraged foreign exchange trading. Statement I is accurate because the SFO defines and regulates leveraged foreign exchange trading activities to protect investors and maintain market integrity. Statement II is also correct; the Securities and Futures (Leveraged Foreign Exchange Trading) (Arbitration) Rules (Cap 571F) provide a framework for resolving disputes related to leveraged foreign exchange trading through arbitration, offering an alternative to court proceedings. Statement III is incorrect because the Securities and Futures (Client Securities) Rules (Cap 571H) and the Securities and Futures (Client Money) Rules (Cap 571I) are designed to protect client assets, including securities and money, but are not specifically tailored to leveraged foreign exchange trading. While these rules apply to all licensed corporations, including those engaged in leveraged foreign exchange trading, they are not exclusive to it. Statement IV is incorrect because the Securities and Futures (Fees) Rules (Cap 571AF) outline the fees payable to the Securities and Futures Commission (SFC) for various regulatory functions, such as licensing and registration, but do not directly address the conduct of leveraged foreign exchange trading activities. Therefore, only statements I and II are correct.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. Section 114 outlines the circumstances under which a person is considered to be carrying on a business in leveraged foreign exchange trading. Specifically, it details that if a person holds himself out as carrying on a business in leveraged foreign exchange trading, or receives or solicits orders for leveraged foreign exchange contracts, or operates a platform for such trading, they are deemed to be conducting that business. This section is crucial for determining who is subject to the licensing requirements and regulatory oversight of the Securities and Futures Commission (SFC). Understanding this section is vital for ensuring compliance with the regulatory framework and avoiding potential legal repercussions. It’s important for individuals and corporations involved in leveraged foreign exchange trading to be aware of these provisions to ensure they are operating within the bounds of the law and adhering to the standards set forth by the SFC. The SFO aims to maintain market integrity and protect investors by regulating those who actively engage in leveraged foreign exchange activities.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the legal framework for regulating various market activities, including leveraged foreign exchange trading. Statement I is correct because the SFO indeed provides the foundation for regulating leveraged foreign exchange trading activities, defining what constitutes such trading and setting out the licensing requirements for intermediaries.

Statement II is also correct. The Securities and Futures (Leveraged Foreign Exchange Trading) (Arbitration) Rules (Cap 571F) specifically provide a framework for resolving disputes related to leveraged foreign exchange trading through arbitration. This subsidiary legislation supports the SFO by offering a mechanism for addressing conflicts that may arise between licensed corporations and their clients.

Statement III is incorrect. While the HKMA plays a crucial role in maintaining monetary and financial stability in Hong Kong, its direct regulatory oversight of leveraged foreign exchange trading is limited. The SFC is the primary regulator responsible for licensing and supervising intermediaries engaged in leveraged foreign exchange trading.

Statement IV is incorrect. The Securities and Futures (Client Securities) Rules and the Securities and Futures (Client Money) Rules (Cap 571H and Cap 571I respectively) are designed to protect client assets held by licensed corporations. While these rules are important for ensuring the safety of client funds and securities, they are not specifically tailored to address the unique risks associated with leveraged foreign exchange trading. Therefore, the correct combination is I & II only.

The Securities and Futures Ordinance (SFO) is a cornerstone of Hong Kong’s regulatory framework for financial markets. It establishes the legal basis for regulating various activities, including leveraged foreign exchange trading. The SFO empowers the Securities and Futures Commission (SFC) to oversee and enforce regulations related to market misconduct, licensing of intermediaries, and investor protection. Understanding the SFO’s scope and provisions is crucial for licensed persons engaging in leveraged foreign exchange trading to ensure compliance and maintain the integrity of the market. The SFO also defines key terms and concepts relevant to leveraged foreign exchange trading, providing a clear legal framework for the industry. Furthermore, subsidiary legislation under the SFO provides detailed rules and guidelines on specific aspects of leveraged foreign exchange trading, such as financial resources requirements and client money rules. Therefore, familiarity with the SFO is essential for all participants in the leveraged foreign exchange market in Hong Kong.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the legal framework for regulating various market activities, including leveraged foreign exchange trading. Understanding the SFO’s scope is crucial for anyone involved in this sector. The SFO outlines the activities that fall under its regulatory purview, ensuring that market participants adhere to certain standards of conduct and operational practices. This includes licensing requirements, financial resource rules, and ongoing obligations for licensed persons. The SFO also empowers the Securities and Futures Commission (SFC) to oversee and enforce these regulations, contributing to market integrity and investor protection. Therefore, a solid grasp of the SFO’s background and scope is essential for compliance and responsible conduct in the leveraged foreign exchange trading industry in Hong Kong. It is important to note that the SFO is constantly evolving, with amendments and updates being introduced to address emerging market trends and challenges. Staying informed about these changes is vital for maintaining compliance and ensuring that business practices align with the latest regulatory requirements. The SFO is a cornerstone of the regulatory framework for leveraged foreign exchange trading in Hong Kong, and its provisions must be carefully considered by all market participants.

The Securities and Futures Ordinance (SFO) empowers the Securities and Futures Commission (SFC) to establish and enforce rules concerning financial resources for licensed corporations. These rules, detailed in the Securities and Futures (Financial Resources) Rules (Cap 571N), are crucial for maintaining the financial stability of intermediaries and protecting client assets. The liquid capital requirement, a key component of these rules, ensures that licensed corporations possess sufficient liquid assets to meet their current obligations and withstand potential financial shocks. This requirement is not merely a static figure but is dynamically calculated based on the nature and scale of the corporation’s operations, including its liabilities and risk exposures. Regular monitoring and reporting of liquid capital are mandatory, enabling the SFC to promptly identify and address any potential breaches. Failure to comply with these financial resource rules can lead to disciplinary actions, including fines, suspension, or revocation of licenses, underscoring the importance of adherence to these regulatory standards for all leveraged foreign exchange traders. The paid-up share capital requirement is also important, but the liquid capital requirement is more closely tied to the ongoing, day-to-day solvency of the firm.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the regulatory framework for various market activities, including leveraged foreign exchange trading. Statement I is correct because the SFO indeed provides the overarching legal structure within which leveraged foreign exchange trading is regulated. Statement II is also correct as the Securities and Futures Commission (SFC) is empowered by the SFO to oversee and regulate leveraged foreign exchange trading activities, ensuring market integrity and investor protection. The SFC’s regulatory objectives include maintaining fair, efficient, and transparent markets, reducing systemic risk, and assisting in maintaining Hong Kong’s position as an international financial center. Statement III is incorrect because while the Hong Kong Monetary Authority (HKMA) regulates financial institutions, its direct regulatory role in leveraged foreign exchange trading is less prominent compared to the SFC, particularly for licensed corporations that are not registered institutions. Statement IV is correct because subsidiary legislation, such as the Securities and Futures (Leveraged Foreign Exchange Trading) (Arbitration) Rules, provides specific details and operational guidelines for the implementation of the SFO in relation to leveraged foreign exchange trading, including dispute resolution mechanisms. Therefore, the correct combination is I, II & IV only.

The Securities and Futures Ordinance (SFO) empowers the Securities and Futures Commission (SFC) to establish and enforce regulations concerning leveraged foreign exchange (LFX) trading activities in Hong Kong. A crucial aspect of this regulatory framework is the licensing of intermediaries. The SFC assesses the ‘fitness and properness’ of individuals and corporations seeking to become licensed intermediaries. This assessment is not a one-time event but a continuous requirement. The SFC’s regulatory objectives include maintaining market integrity, protecting investors, and reducing systemic risk. To achieve these objectives, the SFC is vested with powers to supervise, investigate, and discipline licensed intermediaries. The ‘fit and proper’ criteria encompass various factors, including the applicant’s financial soundness, competence, integrity, and reputation. The continuous nature of this requirement ensures that licensed intermediaries consistently meet the SFC’s standards throughout their operational tenure. Failure to maintain these standards can result in disciplinary actions, including suspension or revocation of licenses. This framework is designed to promote a stable and reliable LFX trading environment in Hong Kong, aligning with international best practices and regulatory standards.

The Securities and Futures Ordinance (SFO) empowers the Securities and Futures Commission (SFC) to establish and enforce regulations concerning leveraged foreign exchange (LFX) trading activities in Hong Kong. A crucial aspect of this regulatory oversight involves setting financial resource requirements for licensed corporations engaged in LFX trading. These requirements, detailed in the Securities and Futures (Financial Resources) Rules, aim to ensure that LFX traders maintain sufficient capital to meet their financial obligations and withstand potential losses.

The paid-up share capital requirement is a minimum threshold of capital that a corporation must have raised through the issuance of shares. This requirement ensures that the corporation has a substantive financial base from which to operate. The liquid capital requirement, on the other hand, focuses on the availability of assets that can be quickly converted into cash to cover immediate liabilities. This requirement is designed to protect clients and counterparties by ensuring that the LFX trader can meet its obligations even in adverse market conditions.

Therefore, maintaining adequate paid-up share capital and liquid capital are essential for LFX traders to demonstrate financial stability and comply with regulatory standards set by the SFC.

The Securities and Futures Ordinance (SFO) grants the Securities and Futures Commission (SFC) the authority to supervise and regulate leveraged foreign exchange trading activities in Hong Kong. This includes licensing intermediaries, setting conduct standards, and enforcing regulations to protect investors and maintain market integrity. The SFC’s regulatory objectives encompass ensuring fair and orderly markets, reducing systemic risk, and promoting investor confidence. The SFO empowers the SFC to investigate misconduct, impose sanctions, and take disciplinary actions against licensed persons who violate the ordinance or its subsidiary legislation. This regulatory framework aims to foster a transparent and reliable environment for leveraged foreign exchange trading, safeguarding the interests of both market participants and the public. The SFC also plays a crucial role in monitoring financial resources of licensed corporations and ensuring compliance with anti-money laundering regulations. Therefore, understanding the SFC’s role and powers under the SFO is essential for anyone involved in leveraged foreign exchange trading in Hong Kong.

The Securities and Futures Ordinance (SFO) is indeed the primary legislation governing the securities and futures markets in Hong Kong, including leveraged foreign exchange trading. Therefore, statement I is correct. The SFO empowers the Securities and Futures Commission (SFC) to regulate various aspects of leveraged foreign exchange trading, such as licensing, conduct of business, and financial resources. This aligns with statement II, which is also correct. While the Hong Kong Monetary Authority (HKMA) oversees banking institutions, its direct regulatory role in leveraged foreign exchange trading firms that are not registered institutions is limited. The SFC is the primary regulator for these firms. Thus, statement III is incorrect. The Securities and Futures Appeals Tribunal provides a venue for appealing certain decisions made by the SFC, including those related to licensing and disciplinary actions in leveraged foreign exchange trading. This makes statement IV correct. Therefore, the correct combination is I, II & IV only.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes a comprehensive regulatory framework for various market activities, including leveraged foreign exchange trading. The SFO empowers the Securities and Futures Commission (SFC) to regulate and supervise these activities, ensuring market integrity and investor protection. The ordinance defines key terms, outlines licensing requirements for intermediaries, and sets out rules for market conduct. Subsidiary legislation, such as the Securities and Futures (Leveraged Foreign Exchange Trading) (Arbitration) Rules, supplements the SFO by providing detailed regulations on specific aspects of leveraged foreign exchange trading, including dispute resolution mechanisms. These rules establish procedures for arbitration, offering an alternative to court proceedings for resolving disputes between licensed corporations and their clients. Understanding the scope and provisions of the SFO and its subsidiary legislation is crucial for licensed persons engaging in leveraged foreign exchange trading to ensure compliance and maintain ethical standards. The SFO aims to promote fair, efficient, and transparent markets, fostering investor confidence and contributing to the stability of the financial system.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the legal framework for regulating various aspects of the industry, including leveraged foreign exchange trading. Statement I is correct because the SFO indeed defines and regulates leveraged foreign exchange trading activities, setting out the requirements for licensing and conduct of business. Cap 571A, the Securities and Futures (Unsolicited Calls — Exclusion) Rules, aims to protect investors from aggressive marketing tactics by restricting unsolicited calls related to investments, making Statement II correct. Statement III is incorrect; while the HKMA plays a crucial role in maintaining monetary and financial stability in Hong Kong, its direct regulatory oversight of leveraged foreign exchange trading firms is secondary to the SFC. The SFC is the primary regulator. Statement IV is incorrect because the Securities and Futures Appeals Tribunal handles appeals against certain decisions made by the SFC and other regulatory bodies, not the HKMA. Therefore, the correct combination is I & II only.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the regulatory framework for various market activities, including leveraged foreign exchange trading. Statement I is correct because the SFO indeed provides the overarching legal structure within which leveraged foreign exchange trading is regulated. Statement II is also correct; the SFO outlines the specific activities that fall under its regulatory purview, including defining what constitutes leveraged foreign exchange trading. Statement III is incorrect because, while the Securities and Futures Appeals Tribunal handles appeals related to SFC decisions, the Leveraged Foreign Exchange Trading Arbitration Panel specifically deals with disputes related to leveraged foreign exchange trading. Statement IV is correct as the SFO empowers the SFC to create subsidiary legislation, such as rules and codes, to provide more detailed guidance and requirements for licensed persons engaging in leveraged foreign exchange trading. Therefore, the correct combination is I, II & IV only.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the regulatory framework for various market activities, including leveraged foreign exchange trading. Statement I is correct because the SFO indeed defines the scope and activities regulated within the securities and futures industry, including leveraged foreign exchange trading. Statement II is also correct, as the SFO empowers the Securities and Futures Commission (SFC) to oversee and regulate leveraged foreign exchange trading activities, ensuring market integrity and investor protection. Statement III is incorrect; while the HKMA regulates financial institutions, its direct regulatory role in leveraged foreign exchange trading is secondary to the SFC. Statement IV is also correct, as the SFO provides the legal basis for subsidiary legislation, such as the Securities and Futures (Leveraged Foreign Exchange Trading) (Arbitration) Rules, which further detail the regulatory requirements and procedures for specific aspects of leveraged foreign exchange trading. Therefore, the correct combination is I, II & IV only.

The Securities and Futures Ordinance (SFO) empowers the Securities and Futures Commission (SFC) to establish and enforce rules regarding financial resources for licensed corporations. These rules, detailed in the Securities and Futures (Financial Resources) Rules (Cap 571N), are crucial for maintaining the financial stability of intermediaries and protecting client interests. The liquid capital requirement, a key component of these rules, ensures that licensed corporations possess sufficient liquid assets to meet their immediate obligations. This requirement is calculated based on a prescribed formula that considers various assets and liabilities.

Failure to meet the minimum liquid capital requirement can result in regulatory actions by the SFC, including restrictions on business operations, suspension of licenses, or even revocation of licenses. Licensed corporations are obligated to monitor their liquid capital position regularly and report any deficiencies to the SFC promptly. The SFC’s oversight in this area is vital for preventing systemic risks and maintaining investor confidence in the leveraged foreign exchange trading market. Therefore, maintaining adequate liquid capital is not merely a compliance issue but a fundamental aspect of responsible business conduct for licensed corporations.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the regulatory framework for leveraged foreign exchange trading.

Statement I is correct because the SFO does indeed define the scope and activities regulated, including leveraged foreign exchange trading. This definition is crucial for determining which entities and activities fall under the SFC’s regulatory purview.

Statement II is incorrect because while the Securities and Futures (Leveraged Foreign Exchange Trading) (Arbitration) Rules (Cap 571F) provide a framework for arbitration, they do not grant the SFC the power to directly resolve disputes between clients and licensed corporations. The Arbitration Panel facilitates the process, but the SFC’s role is primarily regulatory oversight.

Statement III is correct because the SFO empowers the SFC to license and supervise intermediaries engaging in regulated activities, including leveraged foreign exchange trading. This licensing regime ensures that only fit and proper individuals and corporations are permitted to operate in the market.

Statement IV is incorrect because the Securities and Futures (Client Securities) Rules (Cap 571H) and the Securities and Futures (Client Money) Rules (Cap 571I) outline the requirements for handling client assets, they do not specifically address the segregation of duties within a licensed corporation. Segregation of duties is covered under the Management, Supervision and Internal Control Guidelines issued by the SFC.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes the legal framework for regulating various activities, including leveraged foreign exchange trading. Statement I is correct because the SFO indeed defines and regulates leveraged foreign exchange trading activities, setting out the requirements for licensing and conduct of business. Statement II is also correct. The Securities and Futures (Leveraged Foreign Exchange Trading) (Arbitration) Rules (Cap 571F) provide a framework for resolving disputes related to leveraged foreign exchange trading through arbitration, offering an alternative to court proceedings. Statement III is incorrect because the Securities and Futures (Client Securities) Rules (Cap 571H) and the Securities and Futures (Client Money) Rules (Cap 571I) are designed to protect client assets, including both securities and money, and are applicable to licensed corporations dealing with these assets, not specifically to Registered Institutions. Statement IV is correct because the Securities and Futures (Financial Resources) Rules (Cap 571N) sets out the minimum financial resources, including paid-up share capital and liquid capital, that licensed corporations engaging in leveraged foreign exchange trading must maintain to ensure their financial stability and ability to meet their obligations. Therefore, statements I, II, and IV are correct.

The Securities and Futures Ordinance (SFO) is the primary legislation governing the securities and futures markets in Hong Kong. It establishes a comprehensive regulatory framework to ensure market integrity, protect investors, and promote Hong Kong’s position as an international financial center. Statement I is correct because the SFO indeed defines the scope of regulated activities, including leveraged foreign exchange trading, and sets out the legal requirements for engaging in such activities. Statement II is also correct; the SFO empowers the Securities and Futures Commission (SFC) to license and supervise intermediaries, including those involved in leveraged foreign exchange trading, ensuring they meet the required standards of competence and financial soundness. Statement III is incorrect because while the SFO provides a framework for investor protection, it does not directly guarantee profits or protect against losses incurred through leveraged foreign exchange trading. The inherent risks associated with leveraged trading mean that losses are possible, and the SFO focuses on ensuring fair practices and adequate risk disclosure. Statement IV is incorrect as the Securities and Futures Appeals Tribunal is established to review decisions made by the SFC, not the HKMA, regarding licensing and disciplinary matters. Therefore, the correct combination is I & II only.