Related People

The recent case of Tang Hanbo v. The Securities and Futures Commission and another1, provides an interesting insight into the SFC's increasingly close co-operation with the CSRC and illustrates the SFC's power to share information with the CSRC and other regulators outside Hong Kong.

On 8 December 2017, the Hong Kong Court of First Instance refused a judicial review application against the Securities and Futures Commission (SFC) and a Magistrate sitting at the Eastern Magistracy. The Application was made by Mr Tang Hanbo, a PRC national residing in Hong Kong. Tang sought to quash a search warrant (the "Search Warrant") obtained by the SFC from the Magistrate and the SFC's decision to transmit materials seized during its search to the China Securities Regulatory Commission (CSRC).

The SFC's Investigation

The SFC commenced an investigation against Tang and his wife in relation to suspected breaches of the Hong Kong Codes on Takeovers and Mergers and Share Buy-backs, and suspected offences under the Securities and Futures Ordinance (Cap. 571) (the "SFO") for the trading of shares in two Hong Kong listed companies. Meanwhile, the CSRC was investigating Tang and another person for alleged market misconduct in mainland China in relation to the trading in the shares of a Shanghai-listed company.

CSRC's Request for Assistance from SFC

In June 2016, the CSRC sent a request to the SFC for investigatory assistance. Subsequent to the CSRC's request, the SFC obtained the Search Warrant from the Magistrate and, in execution of the Search Warrant (the "Search"), seized notebook computers, mobile phones and documents at Tang's residence.

The SFC's Application for Search Warrant

When the SFC applied for the Search Warrant, the Magistrate was informed that the warrant was for investigating breaches of Hong Kong laws and regulatory codes. The SFC did not disclose to the Magistrate the CSRC's investigation, nor did it mention the CSRC's interest in Tang and the materials to be seized. However, when the SFC was conducting the Search, the SFC officers tried to get Tang to speak with the CSRC officers on the phone and also (through their superior in the SFC's office) kept the CSRC officers updated as to what had been seized and what appeared to be in the computers.

Transmission of Documents to CSRC

After the Search, the CSRC sent several requests to the SFC for further assistance, and the SFC transmitted the requested materials (which included materials seized during the Search) to the CSRC.

CSRC's Action Against Tang and Others

On 10 March 2017, after two hearings pursuant to notices issued by the CSRC in November 2016, which referred to the Search and materials seized by the SFC during the Search, Tang and others were convicted and penalties totalling RMB 1.2 billion were imposed on them by the CSRC2.

Tang's Challenge to the Search Warrant

Tang sought to challenge the Search Warrant on the basis that it had been obtained by deliberate non-disclosure and a misleading description of the true purpose behind it which Tang alleged was to assist the CSRC's investigation. Tang also sought to challenge the SFC's decision to transmit materials to the CSRC based on the same illegality, which tainted the Search Warrant.

The SFC's Response

The SFC's case was that there was no reason for it to have deliberately misled the Magistrate by withholding the true purpose of the Search Warrant when they had the right to render assistance to the CSRC. The SFC also pointed out that the transmission of information was based on the CSRC's request after the Search.

Court's Decision

Mr Justice Anthony Chan refused the Application. He considered Tang was unable to establish there was deliberate non-disclosure, which the judge considered to be inherently improbable, contrary to common sense and against the weight of the contemporaneous documents.


The SFC is empowered by Section 186 of the SFO to provide investigatory assistance to other regulators outside Hong Kong (e.g., the CSRC) in appropriate circumstances and it does so regularly.

This decision confirms that the SFC may pass on what it has gathered in its investigations to the CSRC, even if the information was collected by the SFC for its own investigations in the first place.

With the increasing volume of trading through both Shanghai-Hong Kong Stock Connect and Shenzhen-Hong Kong Stock Connect, collaboration between the SFC and the CSRC will only increase. In a press release issued in June 20173, the CSRC disclosed it had already commenced 365 cross-border enforcement matters as a result of the cooperation with the SFC since the commencement of the Shanghai-Hong Kong Stock Connect in November 2014. Tang's case is a further testament to the close collaboration between the SFC and the CSRC in assisting each other's investigations.

Anyone who is subject to the SFC's investigations and anyone who has been requested by the SFC to provide assistance should bear in mind the possible wider implications of the SFC's investigation, including the prospect that the SFC may transmit the information and documents it obtains to regulators in other jurisdictions. It is therefore prudent for parties involved in the SFC's or the CSRC's investigations to seek legal advice at an early stage in order to safeguard their interests.

1 HCAL 229/2016
2 See the decisions made by CSRC dated 10 March 2017 ( and
3 See the press announcement of the CSRC dated 30 June 2017 (