Hong Kong: The Securities and Futures Ordinance - Guidelines for Dealing with an On-site Investigation Conducted by the SFC at a Company's Premises

Last Updated: 14 February 2011
Article by John M. Hickin and Thomas S.T. So
Most Read Contributor in Hong Kong, September 2016

Originally published 11 February 2011

Keywords: Securities and Futures Ordinance, Hong Kong, on-site investigation, SFC, financial regulators

The Securities and Futures Ordinance (Cap. 571) (SFO) empowers the Securities and Futures Commission (SFC) to enter business premises of corporates and residential premises of employees (or any subjects of an investigation) to search for documents and information relevant to an investigation, copy or confiscate relevant materials, and conduct questioning of individuals (which may be conducted on the spot or by serving a formal notice on such individuals setting out the date and place of the interview).

These guidelines provide some general guidance for business representatives of a company in the event an investigation is conducted at the company's premises. Please note, however, these guidelines are not a substitute for formal legal advice which the company is encouraged to seek immediately when faced with an investigation targeted at the company and/or any of its personnel.

Generally, the business representatives of the company should at all times remember the following:


  1. Be calm and courteous
  2. Check and take a copy of the identification and court warrant that the investigation officials should have in their possession
  3. Report to your supervisor and/or seek legal advice on behalf of the company (if you are authorised by the company to do so)
  4. Answer questions succinctly, directly and truthfully, but do not 'volunteer' information
  5. Ensure the investigation officials are accompanied and monitored at all times, ideally by a lawyer acting for the corporate whose premise is being searched
  6. Keep a record of all documents inspected, copied and/or seized by the investigation officials, as well as all questions asked and answers provided
  7. Do not sign anything you do not agree with
  8. Maintain secrecy of the investigation and do not discuss the matter with anyone other than your supervisor who is in charge of the matter and/or legal advisors

The following step-by-step guidelines deal with different stages in an investigation.

Step by Step Guidance:

When investigation officials arrive

Preparation: Ensure that reception staff and other key personnel in each major business premises have the contact details of relevant internal or external lawyers to contact, and a copy of this guidance document, so that they can respond quickly in the event of an on-site investigation.


  1. Business representatives should contact the relevant Compliance Officer (if applicable) or in-house lawyer (and, if instructed, external lawyers) and the most senior executive available, and ask them to attend the location of the investigation immediately, if possible, to assist in dealing with the investigation.
  2. The investigation officials should be politely requested to wait in a closed meeting room until the arrival of the Compliance Officer or legal advisors. However, as there is no obligation on the investigation officials to do so, they should not be refused entry to other areas of the premises if they insist on this - subject to the matters set out in section 2 directly below.
  3. Under the SFO, people who have knowledge of or relating to an investigation conducted by the SFC are subject to a statutory secrecy obligation in respect of such knowledge. Therefore, business representatives should not disclose any information in relation to or the existence of an investigation to any person other than the relevant Compliance Officer and/or lawyers.


  1. SFC investigation officials conducting an on-site investigation are required to present valid identification documents as well as a court warrant authorising their entry to the site and seizure of materials. These documents should be requested and photocopied. If those documents are not provided, call a manager and the police.
  2. Check carefully whether the information contained in the warrant (in particular, the address of the premises) are correct. If the information is not correctly stated the business representatives should raise this to the SFC investigation officials and may consider refusing entry.


  1. The court warrant authorising the SFC investigation officials to carry out an on-site investigation should contain details such as the purpose and authorised scope of the investigation. It is important that these matters are noted, and communicated to all business representatives involved in dealing with the officials, so they understand the subject matter of the investigation and the extent of their obligation to assist the officials.

During the on-site investigation

Preparation: Each business centre should have an appointed 'response team' that is ready to deal with any on-site investigation. Where possible, the team should include an in-house lawyer, staff who can assist with note-taking and photocopying, and a senior manager who can report the matter to the board or top management.


  1. In view of the statutory secrecy obligation (section 378, SFO) imposed on persons who have knowledge concerning or arising from the investigation, the existence of an investigation should only be communicated by the business representatives to personnel on a need-to-know basis.
  2. For instance, the 'response team' should be alerted and other staff, such as IT staff, may also be informed as occasionally the SFC will be authorised under the court warrant to seize electronic documents from the servers located in the premises.
  3. If the workstation of a particular individual is searched by the SFC investigation officers, such individual should also be informed of the purpose of the search. Care should be exercised to ensure this communication is worded in a manner that will not cause undue concern.
  4. Staff should also be advised the investigation is standard enforcement practice, and if they have any concern, they should consult the response team.


  1. Response team staff should accompany the investigation officials throughout their inspection of the business premises. The investigation officials are not entitled to refuse to be accompanied.
  2. Ideally, one staff member should focus on creating a written record of the investigation process, including areas visited, staff spoken to, documents inspected or copied, and comments made by the investigation officials.
  3. Another staff member should assist investigation officials with any requests they make (such as organising copies of documents), and a further staff member (or, ideally, an in-house or external lawyer) should be in charge of all further liaison with the investigation officials.


  1. Investigation officials may request staff assistance to copy or remove documents for inspection. Where this occurs, reasonable assistance should be provided. However:
    1. Where possible, check if any document requested to be copied or removed falls within the scope of the authorised investigation. While it is up to the investigation officials to decide this issue, an objection should be recorded in cases where it seems apparent that the investigation officials are exceeding the scope of their authority provided by the SFO or the warrant, or if the documents sought to be seized are subject to legal professional privilege.
    2. Where copies of documents are requested to be made, two such copies should be made - one for the Investigation officials and one for the company's future reference.
    3. It is very common for the SFC investigation officials to bring along their own IT experts, who will seek to seize or copy the complete electronic server or individual e-mail boxes of certain individuals. Invariably these e-mail servers may contain communications between the company and its legal advisors, which are subject to legal professional privilege. The business representatives should inform the SFC investigation officials that the company reserves all of its rights in respect of such privileged materials and try to work out with the SFC investigation officials a set of protocols to filter out such materials at a later stage.


SFC investigation officials may question business representatives on matters relating to the investigation. Generally, the SFC may either question the individuals on the spot or issue a statutory notice to the individuals requiring the individuals to attend an interview (likely at the SFC's headquarters in Central) on a later date.

  1. Questioning on the Spot

    Where the investigation officials seek to question any individuals on the spot, the following procedures should be adhered to:

    1. SFC investigation officials should generally limit their questions to documents and materials seized at the premises, and such questions should be directed to such individuals who are in custody or have knowledge of the documents and materials. Any persons who are questioned but do not have knowledge of the subject matter should inform the SFC investigation officials accordingly and politely decline to provide any answer.
    2. SFC investigation officials will usually obtain answers to their questions by first talking through the subject matter with the individual and then preparing a draft written statement for the individual's signature, and provide a copy of the statement to the individual for his retention. The individual concerned should carefully review the draft statement and remove any matters which he is not sure of or does not feel comfortable to give as an answer. If he does not agree to the content, he should refuse to sign it.
    3. SFC investigation officials have no right to detain any individuals for questioning or prohibit any individuals from seeking assistance or legal advice. If any individual being questioned feels intimidated or uncertain regarding certain issues, he should request to speak to a more senior manager of the company or an in-house or external lawyer.
    4. Importantly, when providing answers or making a statement to the SFC, misleading answers or answers which are known to be false should not be given. Otherwise, it may be a criminal offence.

  2. Questioning pursuant to a statutory notice under the SFO

    The SFO empowers SFC investigation officials to issue a written notice to an individual requiring him to attend on a specified date and time for interviews (section 183, SFO). There are a number of legal implications attached to such a notice and the interview. As such, it is important that an individual who receives such a notice should seek legal advice without delay.

    1. SFC investigation officials may issue a written notice to an individual on the spot. If the recipient of the notice thinks the notice given for the interview is too short and he needs more time to seek proper legal advice, he should raise it with the SFC investigation officials immediately and seek to arrange a later date for the interview.
    2. Depending on the circumstances, the external legal adviser instructed by the company may not be able to advise the individuals in respect of such interview. As such the company may consider arranging for separate legal representation for the individual concerned.


  1. In relation to any documents seized or copied by the investigation officials, business representatives should state that the company claims confidentiality, irrelevance and privilege over such documents and the information they contain.
  2. Legally, the SFC is entitled to review documents which contain confidential information or information irrelevant to the investigation as the SFC is subject to the same statutory secrecy provision in respect of their investigation. However, the company should raise these issues at the outset with a view to working out an agreed protocol with the SFC to filter out such materials, especially when a large volume of electronic documents are seized by the SFC.
  3. Also see 3(a)(iii) above regarding asserting privilege.


  1. SFC investigation officials will document in full the items and documents seized from the premises, and may request to have these records signed by persons questioned or investigated. Staff asked to review and sign such records should obtain a copy, and request an opportunity to review them in detail (ideally, with a legal advisor) and should only sign the document if they are satisfied the contents are accurate.
  2. Also see 4(a)(ii) above regarding written statement provided to the SFC.

After conclusion of the on-site investigation

Preparation: The response team or any persons authorised by the company to deal with the investigation should keep the investigation confidential and at the same time continue to take certain steps to preserve evidence until and unless the investigation is formally concluded.


  1. Due to the statutory secrecy obligation imposed by the SFO, business representatives who come into possession of any knowledge of or arising from the investigation should not disclose to or discuss such knowledge with anyone, other than the Compliance Officer or persons appointed by the company to deal with the investigation (such as in-house lawyer or external lawyers).
  2. If any individual receives a written notice from the SFC in respect of any interview, the individual may inform his employer and spouse of the existence of the interview, but not any other information concerning the same.
  3. Breach of this secrecy obligation is a criminal offence. If the company or any of its employees have any uncertainties regarding this obligation, external legal advice should be obtained without delay.


  1. If the investigation officials seal any rooms or filing cabinets, all staff in the business premises should be advised that they may not break the seals under any circumstances.
  2. Any documents or materials which may be relevant to the investigation, but for whatever reason are not seized by the SFC investigation officials, should be preserved. However, such preserved materials should not be volunteered to the SFC unless and until the company is requested by the SFC to produce them by way of a formal written notice or a court warrant.


  1. If the same has not been compiled by the SFC investigation officers on the spot, staff at an appropriate level of seniority should contact the SFC and request they provide a list of all the documents that have been copied and/or seized.


Mayer Brown JSM's Dispute Resolution team is experienced in assisting clients to deal with financial regulators, and to prepare for and manage on-site investigations by the SFC.

Always Remember Do Not Obstruct Investigation


  • Do not refuse admission to SFC investigation officials who have the proper authorisation and identification documentation, and do not keep them waiting unduly
  • Do not tell any person outside the company or those within the company who does not need to be notified what is occurring
  • Do not delay in contacting any executive (however senior) SFC investigation officials ask to see
  • Do not appear unhelpful or obstruct the investigation

Be aware that anyone who destroys evidence, or otherwise obstructs or impedes a SFC investigation may be guilty of a criminal offence.

Learn more about our Hong Kong office, Banking & Finance, Corporate & Securities and Financial Services Regulatory & Enforcement practices.

Visit us at www.mayerbrownjsm.com

Copyright 2011. JSM, Mayer Brown International LLP and/or Mayer Brown LLP. All rights reserved. Mayer Brown is a global legal services organization comprising legal practices that are separate entities ("Mayer Brown Practices"). The Mayer Brown Practices are: JSM, a Hong Kong partnership, and its associated entities in Asia; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales; and Mayer Brown LLP, a limited liability partnership established in the United States. The Mayer Brown Practices are known as Mayer Brown JSM in Asia.

This article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein. Please also read the JSM legal publications Disclaimer.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Mondaq Advice Centre (MACs)
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.