Security law won't affect info flow, says SFC

Securities and Futures Commission chief executive Ashley Alder yesterday reassured global banks that the new national security law would not harm their operations in the city.

The "free flow" of information is one of the "fundamental attributes" that have made Hong Kong an international financial centre, and this is not expected to change under the new law, said Alder.

The law will not affect or alter the existing ways in which firms and listed companies originate, access, disseminate and transmit financial market and related business information under the regulatory regime, he said.

The rules and accepted practices governing market trading activities, including in exchange-traded and over-the-counter derivative markets, the use of hedging strategies and activities under Hong Kong's short-selling regime, also remain unaltered, Alder wrote in a statement.

Alder said that the stock and derivatives markets in Hong Kong have operated in an orderly manner since the enactment of the law and trading in the Hong Kong stock market has been very active. The average daily trading increased substantially in the first half of July, with the participation of a range of local and international investors, as well as mainland investors through Stock Connect, he continued.

Also as the northbound trading through Stock Connect by international investors doubled, Alder believed the data has confirmed Hong Kong's role as the principal conduit for global savings to access the mainland's capital markets.

He added that the principles applicable to, and methodologies used by, analysts in terms of the sources of information and data they use and the manner in which their views and opinions are expressed in their reports should remain unaltered.

Last week, the Financial Times reported that Google, Amazon Web Services and Microsoft have refused to provide customer financial information in their cloud platforms to the SFC.

Hong Kong's major investment banks have been gauging the impact of the laws on their operations, including the independence of analysts' research.

Another concern, particularly for commercial banks, is the US government's planned retaliatory sanctions on financial institutions that do business with those found to have participated in any crackdown on the city.