In view of the growing globalization of the world's financial markets and the increase in cross-

MEMORANDUM OF UNDERSTANDING 
CONCERNING CONSULTATION, COOPERATION AND 
THE EXCHANGE OF INFORMATION 
RELATED TO THE SUPERVISION OF 
CROSS-BORDER REGULATED ENTITIES 
In view of the growing globalization of the world's financial markets and the increase in cross-
border operations and activities ofregulated entities, the 
United States Securities and Exchange 
Commission 
(SEC) and the Hong Kong Securities and Futures Commission (SFC) have reached 
this Memorandum 
of Understanding (MOU) regarding mutual assistance in the supervision and 
oversight 
of regulated entities that operate on a cross-border basis in the United States of 
America and Hong Kong. The SEC and SFC express, through this MOU, their willingness to 
cooperate with each other in the interest of fulfilling their respective regulatory mandates 
particularly in the areas of: investor protection; promoting the compliance culture 
of regulated 
entities that operate on a cross-border basis; fostering the integrity 
of and maintaining confidence 
in capital and financial markets; and reducing systemic risk. 
ARTICLE ONE: DEFINITIONS 
For purposes of this MOU: 
1. "Authority" means: 
a) the 
United States Securities and Exchange Commission (SEC); or 
b) the Hong Kong Securities and Futures Commission 
(SFC). 
2. "Books and Records" means documents, books, and records of, and other information 
about, a Cross-Border Regulated Entity. 
· 
3. (a) "Cross-Border Regulated Entity" means a: (i) Regulated Entity of the SEC and the 
SFC; (ii) Regulated Entity of one Authority that has been exempted from registration by 
the other Authority; (iii) Regulated Entity 
of one Authority that controls, is  controlled by, 
or is  under common control with a Regulated Entity 
of the other Authority; (iv) 
Regulated Entity 
of one Authority that is physically located in the territory of the other 
Authority; (v) Regulated Entity 
of one Authority that manages, advises, operates or 
sponsors an investment vehicle regulated or authorized by the other Authority; or (vi) 
Regulated Entity's 
Service Provider that is physically located in the territory of an 
Authority. 
(b) Cross-Border Regulated Entities may include, but are not limited to, exchanges and 
other trading venues; brokers or dealers; investment advisers; investment fund managers; 
investment funds or investment companies; clearing agencies or houses; and credit rating 
agencies. For purposes 
of clarity, the list of Cross-Border Regulated Entities set forth 
above is meant to be illustrative 
of the types of Regulated Entities providing cross-border 

services in the United States and Hong Kong as of the effective date of this MOU, and 
does not limit the Authorities' ability to cooperate under this 
MOU with regard to the 
supervision 
of other Regulated Entities providing cross-border services that may come 
under their respective jurisdictions in the future.
1 
4. "Emergency Situation" means the occurrence of an event that could materially impair the 
financial or operational condition 
of a Cross-Border Regulated Entity. 
5. "Governmental Entity" means: 
a) The U.S. Department of the Treasury, the U.S. Board of Governors of the Federal 
Reserve 
System, or the Financial Stability Oversight Council, if the Requesting 
Authority is the 
SEC; and 
b) The Hong Kong Monetary Authority and the Hong Kong Financial 
Services and the 
Treasury Bureau, 
if the Requesting Authority is the SFC. 
6. "Local Authority" means the Authority in whose territory a Cross-Border Regulated 
Entity 
is physically located. 
7. 
"On-Site Visit" means any routine, sweep, review, examination or for-cause regulatory 
visit to or inspection 
of the Books and Records and premises of a Cross-Border Regulated 
Entity for the purposes 
of ongoing supervision and oversight. 
8. 
"Person" means a natural person, unincorporated association, partnership, trust, 
investment company, corporation or other legal entity. 
9. 
"Regulated Entity" means a Person that is authorized, designated, qualified, registered, or 
otherwise regulated and supervised or overseen by an Authority. 
10. "Requested Authority" means the Authority to which a request is made under this MOU. 
11. "Requesting Authority" means the Authority making a request under this MOU. 
12. "Service Provider" means a Person to which a Regulated Entity's functions that are 
regulated by an Authority have been outsourced. 
1 
This MOU does not cover cross-border consultation or cooperation with regard to companies that register offerings 
or file periodic reports with the 
SEC, but are not subject to SEC registration and examination based on their business 
activities. 
2 

ARTICLE Two: 
GENERAL PROVISIONS 
13. This MOU is a statement of intent to consult, cooperate and exchange information in 
connection with the supervision and oversight 
of Cross-Border Regulated Entities, in a 
manner consistent with, and permitted by, the laws and requirements that govern the 
Authorities. This 
MOU provides for consultation, cooperation and exchange of 
information related to the supervision and oversight of Cross-Border Regulated Entities 
between the Authorities. The Authorities anticipate that cooperation will be primarily 
achieved through ongoing, informal consultations, supplemented, when necessary, by 
more in-depth cooperation, including through mutual assistance in obtaining written 
information from Cross-Border Regulated Entities. The provisions 
of this MOU are 
intended to support such informal communication as well as to facilitate the written 
exchange 
of non-public information where necessary in accordance with applicable laws. 
14. This MOU does not create any legally binding obligations, confer any rights, or 
supersede domestic laws. This 
MOU does not confer upon any Person the right or ability 
directly 
or indirectly to obtain, suppress, or exclude any information or to challenge the 
execution 
of a request for assistance under this MOU. 
15. This MOU does not limit an Authority to taking solely those measures described herein 
in fulfillment 
of its supervisory functions. In particular, this MOU does not affect any 
right 
of either Authority to communicate with, conduct an On-Site Visit of (subject to the 
procedures described in Article Four), or obtain information or documents from, any 
Person subject to its jurisdiction that is located in the territory of the other Authority. 
16. This 
MOU complements, but does not alter the terms and conditions of the following 
existing arrangements concerning cooperation in securities matters: 
a) The 
IOSCO Multilateral Memorandum of Understanding Concerning Consultation 
and Cooperation and the Exchange 
of information, to which the Authorities are 
signatories; 
b) The Memorandum 
of Understanding Concerning Consultation and Cooperation in the 
Administration and Enforcement 
of Securities Laws, signed on 5 October 1995; and 
c) Declaration on Cooperation and Supervision 
of Cross-Border Investment 
Management Activity, signed on 5 October 1995. 
17. The Authorities will, within the framework of this MOU, provide each other with the 
fullest cooperation permissible under the law in relation to the supervision 
of Cross-
Border Regulated Entities. Following consultation, cooperation may be denied: 
3 

a) Where the cooperation would require an Authority to act in a manner that would 
violate domestic law; 
b) Where a request for assistance 
is not made in accordance with the terms of this MOU; 
or 
c) 
On the grounds of the public interest. 
18. To facilitate cooperation under this MOU, the Authorities hereby designate the following 
contact persons: 
a) For the 
SEC, Director of the Office oflnternational Affairs; 
b) For 
SFC, 
ARTICLE THREE: 
1. Senior Director,  International Affairs; 
IL Senior Director, Intermediaries Supervision; 
m. 
Senior Director, Licensing; and 
iv. Director, Investment Products. 
SCOPE OF SUPERVISORY CONSULTATION, COOPERATION AND THE 
EXCHANGE 
OF INFORMATION 
19. Consultation. The Authorities recognize the importance of close communication 
concerning Cross-Border Regulated Entities, and intend to consult regularly at the staff 
level regarding: (i) general supervisory issues, including regulatory, oversight or other 
related developments; (ii) issues relevant to the operations, activities, and regulation 
of 
Cross-Border Regulated Entities; and (iii) any other areas of mutual supervisory interest. 
Such consultation may include participation in supervisory colleges as resources allow. 
20. Cooperation will be most useful in, but is  not limited to, the following circumstances 
where issues 
of common regulatory concern may arise: 
a) The initial application with an Authority for authorization, designation, qualification, 
registration or exemption therefrom by a Regulated Entity that 
is authorized, 
designated, qualified, registered or otherwise regulated by the other Authority; 
b) The ongoing supervision and oversight 
of a Cross-Border Regulated Entity; and 
4 

c) Regulatory or supervisory actions or approvals taken in relation to a Cross-Border 
Regulated Entity by an Authority that may impact the operations 
of the entity in the 
territory 
of the other Authority. 
21. Advance Notification. Each Authority will, where practicable and reasonable, seek to 
inform the other Authority in advance of, or as soon as possible thereafter of: 
a) 
Pending regulatory changes that may have a significant impact on the operations or 
activities 
of a Cross-Border Regulated Entity; 
b) Any material event 
of which the Authority is  aware that could adversely and directly 
impact a Cross-Border Regulated Entity. 
Such events include known changes in the 
ownership, operating environment, operations, financial resources, management, or 
systems and control 
of a Cross-Border Regulated Entity; 
c) Enforcement or regulatory actions or sanctions, including but not limited to the 
revocation, suspension or modification 
of relevant authorization, designation, 
qualification, registration or exemption therefrom, concerning or related to Cross-
Border Regulated Entity; and 
d) Significant changes in the Authority's rules and regulations or the laws and/or 
regulations applicable 
to the Authority that may negatively impact its ability to 
provide assistance under this 
MOU. 
22. Provision of Unsolicited Information. Where an Authority has information which will 
assist or enable the other Authority in the performance 
of its supervisory functions, the 
former may provide such information, or arrange for such information to be provided, on 
a voluntary basis even though no request has been made by the other Authority, and the 
terms and the conditions 
of this MOU will apply if the providing Authority specifies that 
the information is  provided under this 
MOU. 
23. Exchange of Information. To supplement informal consultations, upon written request, 
each Authority intends to provide the Requesting Authority with assistance in obtaining 
information relevant to ensuring compliance with the laws and regulations and carrying 
out other supervisory functions 
of the Requesting Authority that is  not otherwise 
available to the Requesting Authority. The information covered by this paragraph 
includes, but is not limited to, the following, where appropriate and not otherwise 
available: 
a) Information relevant to the financial and operational condition of a Cross-Border 
Regulated Entity, including, for example, reports 
of capital reserves, liquidity or other 
prudential measures, internal control procedures, and corporate information; 
5 

b) Relevant regulatory information and filings that a Cross-Border Regulated Entity is 
required to submit to an Authority including, for example, interim and annual 
financial statements and early warning notices; and 
c) Regulatory reports prepared by an Authority, including for example: examination 
reports, and findings or information drawn from such reports. 
ARTICLE FOUR: 
ON-SITE VISITS 
24. Where necessary in order to fulfill its supervision and oversight responsibilities and to 
ensure compliance with its laws and regulations, an Authority seeking to examine a 
Cross-Border Regulated Entity located in the other Authority's territory will consult and 
work collaboratively with the Local Authority in conducting an 
On-Site Visit. The 
Authorities will comply with the following procedures before conducting an 
On-Site 
Visit: 
a) The Authority seeking to conduct an 
On-Site visit will provide advance notice to the 
Local Authority 
of its intent to conduct an On-Site Visit, by itself or by a third party 
commissioned by it, and will consult with the Local Authority on the intended 
timeframe and scope 
of the On-Site Visit. 
b) The Local Authority will endeavor to share any relevant examination reports or 
compliance reviews it may have undertaken respecting the Cross-Border Regulated 
Entity with the Requesting Authority. 
c) The Authorities intend to assist each other regarding 
On-Site Visits, including 
cooperation and consultation in reviewing, interpreting and analyzing the contents 
of 
public and non-public Books and Records; and obtaining information from directors 
and senior management and other personnel 
of a Cross-Border Regulated Entity. 
d) The Authorities will consult and, where desired, conduct concurrent visits with a view 
to possibly leveraging resources in the oversight 
of a Cross-Border Regulated Entity. 
ARTICLE FIVE: 
EXECUTION OF REQUESTS FOR ASSISTANCE 
25. To the extent possible, a request for information pursuant to Article Three will be made 
in writing, and addressed to the relevant contact persons identified in 
Paragraph 18. A 
request for information generally should specify the following: 
a) The information sought by the Requesting Authority and an indication 
of any 
sensitivity about the request; 
6 

b) A concise description of the matter which is the subject of the request and the purpose 
for which the information is  sought; and 
c) The desired time period for reply and, where appropriate, the urgency thereof. 
26. In an Emergency Situation, the Authorities will endeavor to notify each other 
of the 
Emergency Situation and communicate information to the other as would be appropriate 
in the particular circumstances, taking into account all relevant factors, including the 
status of efforts to address the Emergency Situation. During an Emergency Situation, 
requests for information may be made in any form, including 
orally~ provided such 
communication is  confirmed in writing as promptly as possible following such 
notification. 
ARTICLE SIX: 
PERMISSIBLE USES OF INFORMATION 
27. Subject to Paragraph 28 the Requesting Authority may use non-public information 
obtained under this 
MOU solely for the purpose of performing its supervisory functions, 
including but not limited to assessing compliance by a Cross-Border Regulated Entity 
with the laws and regulations it  administers. 
28. This 
MOU is  intended to complement, but does not alter the terms and conditions of the 
existing arrangements between the Authorities concerning cooperation in securities 
matters, as set forth in 
Paragraph 16. The Authorities recognize that information is  not to 
be gathered under the auspices 
of this MOU for enforcement purposes. In cases where an 
Authority seeks to use information obtained under this 
MOU for enforcement purposes, 
including in conducting investigations or bringing administrative, civil or criminal 
proceedings, prior consent must be sought from the other Authority. Such use will be 
subject to the terms and conditions of the enforcement cooperation arrangements referred 
to in subsections (a) or (b) of Paragraph 16. 
ARTICLE SEVEN: 
CONFIDENTIALITY OF INFORMATION AND ONWARD SHARING 
29. Each Authority will keep confidential to the extent permitted by law information shared 
under this 
MOU, requests made under this MOU, the contents of such requests, and any 
other matters arising under this 
MOU and, except as provided in Paragraphs 31 and 32 
not disclose non-public information received under this MOU to any third party for any 
purpose unless it has obtained the prior written consent 
of the Requested Authority. 
30. During an Emergency Situation, consent may be obtained in any form, including orally, 
provided such communication is  confirmed in writing as promptly as possible following 
such notification. 
If consent is not obtained from the Requested Authority, the 
Requesting and Requested Authorities will consult to discuss the reasons for withholding 
7 

approval of such use and the circumstances, if any, under which the intended use by the 
Requesting Authority might be allowed. 
31. In certain circumstances, as required by law, it may become necessary for the Requesting 
Authority to share non-public information obtained under this 
MOU with Governmental 
Entities. In these circumstances and to the extent permitted by law: 
a) The Requesting Authority will notify the Requested Authority about what non-public 
information it intends to share, which Governmental Entity will receive the 
information and the Governmental Entity's intended use 
of the information. 
b) Prior to passing on the information, the Requested Authority will receive adequate 
assurances concerning the Governmental Entity's use and confidential treatment 
of 
the non-public information, including, as necessary, assurances that: 
1. the Governmental Entity has confirmed that it performs a function 
similar to a function 
of the Requested Authority or regulates, 
supervises or investigates banking, insurance or other financial 
services; 
n. the Governmental Entity will maintain a level 
of confidentiality in 
respect of the non-public information it has received at least equivalent 
to that which the Requesting Authority is  subject to (including, where 
relevant, restrictions or conditions imposed on it by the Requested 
Authority); 
111. the non-public information will be used for supervisory purposes in a 
manner consistent with Articles 
Six and Seven; and 
1v. the non-public information will not be shared by the Governmental 
Entity with other parties without getting the prior written consent 
of 
the Requested Authority. 
32. To the extent possible, the Requesting Authority will notify the Requested Authority 
of 
any legally enforceable demand for non-public information furnished under this MOU. 
Prior to compliance with the demand, the Requesting Authority shall assist in preserving 
the confidentiality 
of the information by taking all appropriate measures including 
asserting all appropriate legal exemptions or privileges with respect to such information 
as may be available and, where possible, will consult with the Requested Authority in any 
actions or proceedings which seek to safeguard the confidentiality 
of the information. 
33. The Authorities intend that the sharing or disclosure 
of non-public information, including 
but not limited to deliberative and consultative materials, such as written analysis, 
8 

opinions or recommendations relating to non-public information that is  prepared by or on 
behalf 
of an Authority, pursuant to the terms of this MOU, will not constitute a waiver of 
privilege or confidentiality of such information. 
ARTICLE EIGHT: AMENDMENTS 
34. The Authorities will periodically review the functioning and effectiveness of cooperation 
arrangements with a view, 
inter alia, to expanding or altering the scope or operation of 
this MOU should that be judged necessary.  This MOU may be amended with the written 
consent 
of both Authorities. 
ARTICLE NINE: EXECUTION OF MOU 
35. Cooperation in accordance with this MOU will become effective on the date this MOU is 
signed by the Authorities. 
ARTICLE TEN: TERMINATION 
36. Cooperation in accordance with this MOU will continue until the expiration of 30 days 
after either Authority gives written notice 
to the other Authority of its intention to 
terminate this 
MOU. If an Authority gives such notice, cooperation will continue with 
respect to all requests for assistance that were made under this 
MOU before the effective 
date 
of notification until the Requesting Authority terminates the matter for which 
assistance was requested. In the event 
of termination of this MOU, information obtained 
under this 
MOU will continue to be treated in a manner prescribed under Articles Six and 
Seven. 
Signed: 
Mary Jo White 
Chair 
United States Securities and Exchange Commission 
Date: 
9 
Chief Executive Officer 
Hong Kong Securities and Futures 
Commission 

MEMORANDUM OF UNDERSTANDING 

CONCERNING CONSULTATION, COOPERATION AND 

THE EXCHANGE OF INFORMATION 

RELATED TO THE SUPERVISION OF 

CROSS-BORDER REGULATED ENTITIES 

In view of the growing globalization of the world's financial markets and the increase in cross­
border operations and activities ofregulated entities, the United States Securities and Exchange 
Commission (SEC) and the Hong Kong Securities and Futures Commission (SFC) have reached 
this Memorandum of Understanding (MOU) regarding mutual assistance in the supervision and 
oversight of regulated entities that operate on a cross-border basis in the United States of 
America and Hong Kong. The SEC and SFC express, through this MOU, their willingness to 
cooperate with each other in the interest of fulfilling their respective regulatory mandates 
particularly in the areas of: investor protection; promoting the compliance culture of regulated 
entities that operate on a cross-border basis; fostering the integrity of and maintaining confidence 
in capital and financial markets; and reducing systemic risk. 

ARTICLE ONE: DEFINITIONS 

For purposes of this MOU: 

1. "Authority" means: 

a) the United States Securities and Exchange Commission (SEC); or 

b) the Hong Kong Securities and Futures Commission (SFC). 

2. "Books and Records" means documents, books, and records of, and other information 
about, a Cross-Border Regulated Entity. · 

3. (a) "Cross-Border Regulated Entity" means a: (i) Regulated Entity of the SEC and the 
SFC; (ii) Regulated Entity of one Authority that has been exempted from registration by 
the other Authority; (iii) Regulated Entity of one Authority that controls, is controlled by, 
or is under common control with a Regulated Entity of the other Authority; (iv) 
Regulated Entity of one Authority that is physically located in the territory of the other 
Authority; (v) Regulated Entity of one Authority that manages, advises, operates or 
sponsors an investment vehicle regulated or authorized by the other Authority; or (vi) 
Regulated Entity's Service Provider that is physically located in the territory of an 
Authority. 

(b) Cross-Border Regulated Entities may include, but are not limited to, exchanges and 
other trading venues; brokers or dealers; investment advisers; investment fund managers; 
investment funds or investment companies; clearing agencies or houses; and credit rating 
agencies. For purposes of clarity, the list of Cross-Border Regulated Entities set forth 
above is meant to be illustrative of the types of Regulated Entities providing cross-border 



services in the United States and Hong Kong as of the effective date of this MOU, and 
does not limit the Authorities' ability to cooperate under this MOU with regard to the 
supervision of other Regulated Entities providing cross-border services that may come 
under their respective jurisdictions in the future. 1 

4. "Emergency Situation" means the occurrence of an event that could materially impair the 
financial or operational condition of a Cross-Border Regulated Entity. 

5. "Governmental Entity" means: 

a) The U.S. Department of the Treasury, the U.S. Board of Governors of the Federal 
Reserve System, or the Financial Stability Oversight Council, if the Requesting 
Authority is the SEC; and 

b) The Hong Kong Monetary Authority and the Hong Kong Financial Services and the 
Treasury Bureau, if the Requesting Authority is the SFC. 

6. "Local Authority" means the Authority in whose territory a Cross-Border Regulated 
Entity is physically located. 

7. "On-Site Visit" means any routine, sweep, review, examination or for-cause regulatory 
visit to or inspection of the Books and Records and premises of a Cross-Border Regulated 
Entity for the purposes of ongoing supervision and oversight. 

8. "Person" means a natural person, unincorporated association, partnership, trust, 
investment company, corporation or other legal entity. 

9. "Regulated Entity" means a Person that is authorized, designated, qualified, registered, or 
otherwise regulated and supervised or overseen by an Authority. 

10. "Requested Authority" means the Authority to which a request is made under this MOU. 

11. "Requesting Authority" means the Authority making a request under this MOU. 

12. "Service Provider" means a Person to which a Regulated Entity's functions that are 
regulated by an Authority have been outsourced. 

1 This MOU does not cover cross-border consultation or cooperation with regard to companies that register offerings 
or file periodic reports with the SEC, but are not subject to SEC registration and examination based on their business 
activities. 

2 



ARTICLE Two: GENERAL PROVISIONS 

13. This MOU is a statement of intent to consult, cooperate and exchange information in 
connection with the supervision and oversight of Cross-Border Regulated Entities, in a 
manner consistent with, and permitted by, the laws and requirements that govern the 
Authorities. This MOU provides for consultation, cooperation and exchange of 
information related to the supervision and oversight of Cross-Border Regulated Entities 
between the Authorities. The Authorities anticipate that cooperation will be primarily 
achieved through ongoing, informal consultations, supplemented, when necessary, by 
more in-depth cooperation, including through mutual assistance in obtaining written 
information from Cross-Border Regulated Entities. The provisions of this MOU are 
intended to support such informal communication as well as to facilitate the written 
exchange of non-public information where necessary in accordance with applicable laws. 

14. This MOU does not create any legally binding obligations, confer any rights, or 
supersede domestic laws. This MOU does not confer upon any Person the right or ability 
directly or indirectly to obtain, suppress, or exclude any information or to challenge the 
execution of a request for assistance under this MOU. 

15 . This MOU does not limit an Authority to taking solely those measures described herein 
in fulfillment of its supervisory functions. In particular, this MOU does not affect any 
right of either Authority to communicate with, conduct an On-Site Visit of (subject to the 
procedures described in Article Four), or obtain information or documents from, any 
Person subject to its jurisdiction that is located in the territory of the other Authority. 

16. This MOU complements, but does not alter the terms and conditions of the following 
existing arrangements concerning cooperation in securities matters: 

a) The IOSCO Multilateral Memorandum of Understanding Concerning Consultation 
and Cooperation and the Exchange of information, to which the Authorities are 
signatories; 

b) The Memorandum of Understanding Concerning Consultation and Cooperation in the 
Administration and Enforcement of Securities Laws, signed on 5 October 1995; and 

c) Declaration on Cooperation and Supervision of Cross-Border Investment 
Management Activity, signed on 5 October 1995. 

17. The Authorities will, within the framework of this MOU, provide each other with the 
fullest cooperation permissible under the law in relation to the supervision of Cross­
Border Regulated Entities. Following consultation, cooperation may be denied: 

3 



a) Where the cooperation would require an Authority to act in a manner that would 
violate domestic law; 

b) Where a request for assistance is not made in accordance with the terms of this MOU; 
or 

c) On the grounds of the public interest. 

18. To facilitate cooperation under this MOU, the Authorities hereby designate the following 
contact persons: 

a) For the SEC, Director of the Office oflnternational Affairs; 

b) For SFC, 

ARTICLE THREE: 

1. Senior Director, International Affairs; 

IL Senior Director, Intermediaries Supervision; 

m. Senior Director, Licensing; and 

iv. Director, Investment Products. 

SCOPE OF SUPERVISORY CONSULTATION, COOPERATION AND THE 

EXCHANGE OF INFORMATION 

19. Consultation. The Authorities recognize the importance of close communication 
concerning Cross-Border Regulated Entities, and intend to consult regularly at the staff 
level regarding: (i) general supervisory issues, including regulatory, oversight or other 
related developments; (ii) issues relevant to the operations, activities, and regulation of 
Cross-Border Regulated Entities; and (iii) any other areas of mutual supervisory interest. 
Such consultation may include participation in supervisory colleges as resources allow. 

20. Cooperation will be most useful in, but is not limited to, the following circumstances 
where issues of common regulatory concern may arise: 

a) The initial application with an Authority for authorization, designation, qualification, 
registration or exemption therefrom by a Regulated Entity that is authorized, 
designated, qualified, registered or otherwise regulated by the other Authority; 

b) The ongoing supervision and oversight of a Cross-Border Regulated Entity; and 

4 



c) Regulatory or supervisory actions or approvals taken in relation to a Cross-Border 
Regulated Entity by an Authority that may impact the operations of the entity in the 
territory of the other Authority. 

21. Advance Notification. Each Authority will, where practicable and reasonable, seek to 
inform the other Authority in advance of, or as soon as possible thereafter of: 

a) Pending regulatory changes that may have a significant impact on the operations or 
activities of a Cross-Border Regulated Entity; 

b) Any material event of which the Authority is aware that could adversely and directly 
impact a Cross-Border Regulated Entity. Such events include known changes in the 
ownership, operating environment, operations, financial resources, management, or 
systems and control of a Cross-Border Regulated Entity; 

c) Enforcement or regulatory actions or sanctions, including but not limited to the 
revocation, suspension or modification of relevant authorization, designation, 
qualification, registration or exemption therefrom, concerning or related to Cross­
Border Regulated Entity; and 

d) Significant changes in the Authority's rules and regulations or the laws and/or 
regulations applicable to the Authority that may negatively impact its ability to 
provide assistance under this MOU. 

22. Provision of Unsolicited Information. Where an Authority has information which will 
assist or enable the other Authority in the performance of its supervisory functions, the 
former may provide such information, or arrange for such information to be provided, on 
a voluntary basis even though no request has been made by the other Authority, and the 
terms and the conditions of this MOU will apply if the providing Authority specifies that 
the information is provided under this MOU. 

23 . Exchange of Information. To supplement informal consultations, upon written request, 
each Authority intends to provide the Requesting Authority with assistance in obtaining 
information relevant to ensuring compliance with the laws and regulations and carrying 
out other supervisory functions of the Requesting Authority that is not otherwise 
available to the Requesting Authority. The information covered by this paragraph 
includes, but is not limited to, the following, where appropriate and not otherwise 
available: 

a) Information relevant to the financial and operational condition of a Cross-Border 
Regulated Entity, including, for example, reports of capital reserves, liquidity or other 
prudential measures, internal control procedures, and corporate information; 

5 



b) Relevant regulatory information and filings that a Cross-Border Regulated Entity is 
required to submit to an Authority including, for example, interim and annual 
financial statements and early warning notices; and 

c) Regulatory reports prepared by an Authority, including for example: examination 
reports, and findings or information drawn from such reports. 

ARTICLE FOUR: ON-SITE VISITS 

24. Where necessary in order to fulfill its supervision and oversight responsibilities and to 
ensure compliance with its laws and regulations, an Authority seeking to examine a 
Cross-Border Regulated Entity located in the other Authority's territory will consult and 
work collaboratively with the Local Authority in conducting an On-Site Visit. The 
Authorities will comply with the following procedures before conducting an On-Site 
Visit: 

a) The Authority seeking to conduct an On-Site visit will provide advance notice to the 
Local Authority of its intent to conduct an On-Site Visit, by itself or by a third party 
commissioned by it, and will consult with the Local Authority on the intended 
timeframe and scope of the On-Site Visit. 

b) The Local Authority will endeavor to share any relevant examination reports or 
compliance reviews it may have undertaken respecting the Cross-Border Regulated 
Entity with the Requesting Authority. 

c) The Authorities intend to assist each other regarding On-Site Visits, including 
cooperation and consultation in reviewing, interpreting and analyzing the contents of 
public and non-public Books and Records; and obtaining information from directors 
and senior management and other personnel of a Cross-Border Regulated Entity. 

d) The Authorities will consult and, where desired, conduct concurrent visits with a view 
to possibly leveraging resources in the oversight of a Cross-Border Regulated Entity. 

ARTICLE FIVE: EXECUTION OF REQUESTS FOR ASSISTANCE 

25. To the extent possible, a request for information pursuant to Article Three will be made 
in writing, and addressed to the relevant contact persons identified in Paragraph 18. A 
request for information generally should specify the following: 

a) The information sought by the Requesting Authority and an indication of any 
sensitivity about the request; 

6 



b) A concise description of the matter which is the subject of the request and the purpose 
for which the information is sought; and 

c) The desired time period for reply and, where appropriate, the urgency thereof. 

26. In an Emergency Situation, the Authorities will endeavor to notify each other of the 
Emergency Situation and communicate information to the other as would be appropriate 
in the particular circumstances, taking into account all relevant factors, including the 
status of efforts to address the Emergency Situation. During an Emergency Situation, 
requests for information may be made in any form, including orally~ provided such 
communication is confirmed in writing as promptly as possible following such 
notification. 

ARTICLE SIX: PERMISSIBLE USES OF INFORMATION 

27. Subject to Paragraph 28 the Requesting Authority may use non-public information 
obtained under this MOU solely for the purpose of performing its supervisory functions, 
including but not limited to assessing compliance by a Cross-Border Regulated Entity 
with the laws and regulations it administers. 

28. This MOU is intended to complement, but does not alter the terms and conditions of the 
existing arrangements between the Authorities concerning cooperation in securities 
matters, as set forth in Paragraph 16. The Authorities recognize that information is not to 
be gathered under the auspices of this MOU for enforcement purposes. In cases where an 
Authority seeks to use information obtained under this MOU for enforcement purposes, 
including in conducting investigations or bringing administrative, civil or criminal 
proceedings, prior consent must be sought from the other Authority. Such use will be 
subject to the terms and conditions of the enforcement cooperation arrangements referred 
to in subsections (a) or (b) of Paragraph 16. 

ARTICLE SEVEN: CONFIDENTIALITY OF INFORMATION AND ONWARD SHARING 

29. Each Authority will keep confidential to the extent permitted by law information shared 
under this MOU, requests made under this MOU, the contents of such requests, and any 
other matters arising under this MOU and, except as provided in Paragraphs 31 and 32 
not disclose non-public information received under this MOU to any third party for any 
purpose unless it has obtained the prior written consent of the Requested Authority. 

30. During an Emergency Situation, consent may be obtained in any form, including orally, 
provided such communication is confirmed in writing as promptly as possible following 
such notification. If consent is not obtained from the Requested Authority, the 
Requesting and Requested Authorities will consult to discuss the reasons for withholding 

7 



approval of such use and the circumstances, if any, under which the intended use by the 
Requesting Authority might be allowed. 

31. In certain circumstances, as required by law, it may become necessary for the Requesting 
Authority to share non-public information obtained under this MOU with Governmental 
Entities. In these circumstances and to the extent permitted by law: 

a) The Requesting Authority will notify the Requested Authority about what non-public 
information it intends to share, which Governmental Entity will receive the 
information and the Governmental Entity's intended use of the information. 

b) Prior to passing on the information, the Requested Authority will receive adequate 
assurances concerning the Governmental Entity's use and confidential treatment of 
the non-public information, including, as necessary, assurances that: 

1. the Governmental Entity has confirmed that it performs a function 
similar to a function of the Requested Authority or regulates, 
supervises or investigates banking, insurance or other financial 
services; 

n. the Governmental Entity will maintain a level of confidentiality in 
respect of the non-public information it has received at least equivalent 
to that which the Requesting Authority is subject to (including, where 
relevant, restrictions or conditions imposed on it by the Requested 
Authority); 

111. the non-public information will be used for supervisory purposes in a 
manner consistent with Articles Six and Seven; and 

1v. the non-public information will not be shared by the Governmental 
Entity with other parties without getting the prior written consent of 
the Requested Authority. 

32. To the extent possible, the Requesting Authority will notify the Requested Authority of 
any legally enforceable demand for non-public information furnished under this MOU. 
Prior to compliance with the demand, the Requesting Authority shall assist in preserving 
the confidentiality of the information by taking all appropriate measures including 
asserting all appropriate legal exemptions or privileges with respect to such information 
as may be available and, where possible, will consult with the Requested Authority in any 
actions or proceedings which seek to safeguard the confidentiality of the information. 

33. The Authorities intend that the sharing or disclosure of non-public information, including 
but not limited to deliberative and consultative materials, such as written analysis, 

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opinions or recommendations relating to non-public information that is prepared by or on 
behalf of an Authority, pursuant to the terms of this MOU, will not constitute a waiver of 
privilege or confidentiality of such information. 

ARTICLE EIGHT: AMENDMENTS 

34. The Authorities will periodically review the functioning and effectiveness of cooperation 
arrangements with a view, inter alia, to expanding or altering the scope or operation of 
this MOU should that be judged necessary. This MOU may be amended with the written 
consent of both Authorities. 

ARTICLE NINE: EXECUTION OF MOU 

35. Cooperation in accordance with this MOU will become effective on the date this MOU is 
signed by the Authorities. 

ARTICLE TEN: TERMINATION 

36. Cooperation in accordance with this MOU will continue until the expiration of 30 days 
after either Authority gives written notice to the other Authority of its intention to 
terminate this MOU. If an Authority gives such notice, cooperation will continue with 
respect to all requests for assistance that were made under this MOU before the effective 
date of notification until the Requesting Authority terminates the matter for which 
assistance was requested. In the event of termination of this MOU, information obtained 
under this MOU will continue to be treated in a manner prescribed under Articles Six and 
Seven. 

Signed: 

Mary Jo White 
Chair 
United States Securities and Exchange Commission 

Date: 

9 

Chief Executive Officer 
Hong Kong Securities and Futures 
Commission