SFC concludes consultation on further restricting use of misleading names by unregulated entities to protect investors

• Broad support received for proposals to tighten restrictions on misleading entity names.
• Proposals revised to enable faster updates to the list of restricted titles.
• The SFC to introduce an amendment bill into LegCo for consideration and approval. FAQs on the proposed amendments updated on its website.

The Securities and Futures Commission (SFC) today published consultation conclusions on legislative proposals to further restrict unregulated entities from improperly adopting names that may falsely suggest they are regulated entities (Note 1).

Respondents to the consultation expressed broad support for expanding the current list of restricted titles under the Securities and Futures Ordinance (SFO), as well as introducing a similar provision under the Anti-Money Laundering and Counter-Terrorist Financing Ordinance (AMLO) (Notes 2 and 3). Respondents also suggested establishing a mechanism that will enable faster updates to the list of restricted titles. The SFC agreed and has amended the proposals accordingly.

Having considered the market feedback, the SFC will proceed to finalise the legislative amendments to the SFO and AMLO, aiming to introduce a bill into the Legislative Council (LegCo) for consideration and approval.

“The broad support received underscores the importance of protecting investors from names that may falsely imply regulatory status. The proposed amendments will strengthen the restrictions and allow the list of restricted titles to be updated more promptly. This will reinforce investor protection as financial markets and the terminology used by market participants continue to evolve,” said Mr Rico Leung, the SFC’s Executive Director of Supervision of Markets.

To facilitate understanding of and compliance with the proposed requirements, the SFC has also updated the list of frequently asked questions on its website, and will work with the Investor and Financial Education Council to strengthen investor education.

End

Notes:

1. See the press release on the SFC’s consultation on further restricting the use of misleading names to enhance investor protection, launched on 12 June 2025.  During the consultation, the SFC received nine submissions from industry associations, professional bodies, a bank and other interested parties.
2. Section 34 of the SFO currently sets out a list of names that cannot be adopted without the SFC's approval (eg, "stock exchange" and "commodity exchange"). The proposals will expand the provision to include titles that: (i) are now more commonly used instead of “exchange”; (ii) better describe certain financial products regulated under the SFO; (iii) refer more specifically to clearing operations; and (iv) incorporate names or acronyms of well-known or established operations.
3. The new provision under the AMLO will focus on virtual asset trading platforms (VATPs), and virtual assets that are not related to securities or futures contracts, and may be traded or cleared through VATPs.