Asia Financial Regulatory Update - August 2025

Hong Kong SAR

Fintech

Stablecoin regime rules finalised: The Hong Kong Monetary Authority (HKMA) has released the finalised regulatory regime for stablecoin issuers, including detailed guidelines and explanatory notes, which took effect on 1 August 2025 and require all stablecoin issuers to comply with licensing, anti-money laundering, and operational requirements under the new Stablecoins Ordinance. The HKMA has opened the application process for potential licensees and emphasised that, as of now, no licences have been granted, advising both market participants and the public to exercise caution regarding claims of regulatory status.

Bank fintech adoption increasing: The HKMA’s recent Tech Maturity Stock-take has revealed substantial growth in Fintech adoption, particularly in artificial intelligence, distributed ledger technology, and regulatory technology across Hong Kong banks. It also highlights ongoing investment despite economic challenges, outlines key implementation hurdles, and will inform a new industry blueprint to foster further responsible technological innovation.

New cryptoassets capital standards rules: Following industry consultation earlier this year, the capital standards, disclosure and exposure limits in relation to the prudential treatment of cryptoasset exposures promulgated by the Basel Committee on Banking Supervision has been implemented through the Banking (Capital) (Amendment) Rules 2025, Banking (Disclosure) (Amendment) Rules 2025, and Banking (Exposure Limits) (Amendment) Rules 2025. The new rules are expected to come into force on 1 January 2026. 

OTC Derivatives

SFC consultation on Financial Resources Rules: The Securities & Futures Commission of Hong Kong (SFC) has issued a paper with its latest consultation and conclusions on the Securities and Futures (Financial Resources) Rules (FRR) and related guidelines for the implementation of the capital requirements for licensed corporations engaging in OTC derivative activities, paving the way for the eventual implementation of Regulated activities 11 (dealing and advising on OTC derivatives) and 12 (OTC client clearing services).

Banking

Phase 2 of the Mandatory Reference Checking Scheme: The HKMA has informed banks that, effective from 30 September 2025, the Mandatory Reference Checking Scheme will significantly expand its scope beyond senior banking staff to include personnel licensed or registered for securities, insurance, and Mandatory Provident Fund regulated activities. This phase introduces refined guidance and practical examples to assist authorised institutions in discharging their reporting duties and aims to further address misconduct risks associated with the “rolling bad apples” phenomenon across a wider segment of the financial sector.

Consumer Protection

The Anti-Scam Consumer Protection Charter 3.0: The latest version of the charter was jointly launched by Hong Kong's financial and regulatory authorities with support from key industry and enforcement bodies, and establishes a collaborative framework with technology and telecommunications firms to implement six key anti-fraud principles aimed at strengthening consumer protection and combating financial scams in Hong Kong.

SFC Supervision

Extra days for itinerant professionals: The SFC has enhanced its regime for itinerant professionals in Hong Kong, extending the annual period these visiting professionals may conduct regulated activities or provide virtual asset services from 30 to 45 days.

ESG

HKMA physical risk platform released:  The HKMA has now released the formal version of the Platform which was designed to provide an exploratory and capacity building tool to facilitate climate hazard assessments by banks. The HKMA is encouraging all banks to make use of the Platform to enhance their understanding of physical risk.

Enforcement Actions

Market Misconduct Tribunal ruling in Dan Form insider dealing: The MMT found Ms Cynthia Chen Si Ying, the former company secretary of Asiasec Properties Limited (previously Dan Form Holdings Company Limited), and her associate engaged in insider dealing by trading on confidential information about a proposed sale of the company’s controlling stake, resulting in illicit profits. Ms Chen was disqualified from management roles in listed Hong Kong companies for four years, both were ordered to disgorge the profits, pay costs, and received four-year bans on dealing in securities and cease and desist orders from market misconduct.

Nine-year ban for asset manager responsible officer: The SFC continues to take action against  asset managers with its recent ban of a former responsible officer of HF Asset Management Limited from re-entering the industry for nine years, in addition to a fine of HK$350,000 after he failed to properly manage a fund, resulting in defaults and losses of $25.6 million, or 86 per cent of the fund’s net asset value, due to inadequate conflict management in loan and stock lending transactions.

SFC fines Freeman Commodities Limited and suspends manager in charge: The SFC found the firm failed to comply with AMl/CFT, and other regulatory requirements, particularly in client due diligence and monitoring, between June 2017 and December 2018. 

Singapore

Capital Markets

MAS will consult on measures to strengthen investor protection: The Monetary Authority of Singapore (MAS) has announced it will be consulting in 2025 on proposals to enhance investor recourse avenues, and in particular, to allow investors to seek civil recourse if they suffer losses due to market misconduct. These will be important proposals for FIs who offer products to investors in Singapore.

MAS publishes Notice on Capital Requirements for Approved Exchanges, Approved Clearing Houses, and Licensed Trade Repositories: The Notice sets out detailed and complex methodologies for liquid and solvency requirements, and takes effect on 1 October 2025, which does not leave a lot of time to digest the notice for compliance.

MAS has updated its FAQs on Two-Factor Authentication for Online Financial Services Platforms: The FAQs provide guidance to FIs operating online trading and investment platforms on the use of two-factor authentication. This will be critical for FIs to digest in order to meet the MAS’ expectations on technology risk management.

Funds

MAS published a Consultation Paper on Enhancements to Product Highlights Sheet (PHS) Requirements and the Complex Products Framework: The consultation proposes important changes to the complex products framework, including enhanced disclosures and streamlined distribution safeguards, and provides an important indicative direction of travel by MAS. The deadline for comments is 1 September 2025.

Banking

MAS has published a Consultation Paper proposing an updated regulatory framework for measuring and controlling large exposures of merchant banks and  banks: The consultation proposals are intended to address concentration risk in Singapore-incorporated merchant banks. They also are intended to refine the scope of exempted exposures to a related corporation, which will be relevant to  Singapore-incorporated banks.

Digital Finance

UK and Singapore mark the 10th UK-Singapore Financial Dialogue: The 10th UK-Singapore Financial Dialogue focused on digital and finance innovation, sustainable finance, capital markets and international regulatory developments. 

Payments

Responses to consultation paper on roadmap to sunset corporate cheques and the introduction of alternative payment methods: The responses to feedback received will be particularly relevant to banks who offer cheque processing services to clients. It will also be relevant to the payments industry in general, as the MAS emphasises the importance of developing cost-effective payment alternatives. Read our blog post here for further details. 

Tokenisation

Guardian FX workstream: The Guardian Foreign Exchange Industry Group published a report on the use of tokenised bank liabilities for transaction banking. It focuses on two pain points identified by workstream participants and Project Guardian use cases which have been designed to consider or address the pain points. 

Artificial Intelligence

MAS Pathfinder Programme: The MAS has launched an initiative between the MAS and industry, to foster knowledge exchange in AI solutions. PathFin.ai curates a library of proven AI solutions and implementation best practices among FIs. Interested FIs and AI solution providers can register their interest in the initiative.

Enforcement Actions

MAS issues prohibition order: MAS has issued a 5-year prohibition order under the Financial Services and Markets Act (FSMA) against Mr Toh, a former representative of Great Eastern Financial Advisers Private Limited and AXA Insurance Pte Ltd, for misconduct.

MAS takes regulatory actions against nine financial institutions for AML-related breaches: The regulatory actions relate to the S$3 billion money laundering scandal, for AML-related breaches. 

MAS revokes capital markets services licence and reprimands Executive Director : The MAS has revoked the capital markets services licence of Xen Capital Asia Pte. Ltd., and reprimanded Ms Katrina Marie Ku Cokeng, for breaches of the SFA, SFR, FMR, and MAS Notice SFA 04-N04, and its licence conditions.