Hong Kong regulator flags AI speed risks, urges industry cooperation
Hong Kong's securities regulator warns that AI development outpaces government rule-making. A survey shows all major institutions use AI, with 55% testing agentic AI. The regulator calls for industry collaboration on cybersecurity and operational risks, prioritising safety and human oversight.
Hong Kong's Securities and Futures Commission (SFC) chief executive, Yolanda Leung, said on 2 November that the pace of development in frontier AI models and agentic AI has outstripped the ability of governments and regulators to set rules. Speaking at a fintech event, she noted that agentic AI chooses its own execution methods dynamically, making its next steps hard to predict. Leung called for industry cooperation to address cybersecurity, third-party dependence and other operational risks.
Leung warned that if risks such as cybersecurity cannot be managed, a slowdown in AI development should be considered. However, she stressed that the regulator places safety first and that existing requirements already cover necessary governance, risk management and accountability.
The SFC released a survey of 20 large institutions and 78 licensed firms, covering 75 per cent of securities market transactions in the first half of 2026. It found that all surveyed institutions already use AI, and 95 per cent expect to accelerate its adoption in the next year. Nine in ten respondents said they already use or are evaluating AI to guard against cyberattacks, while 55 per cent are currently using or trialling agentic AI.
The SFC reiterated its regulatory approach to AI, described as “safety-first, human-centric and collaboration-led”, ensuring that humans retain control. The policy has four focuses: protecting investors as AI reshapes how they interact with institutions; strengthening cybersecurity and operational resilience against new threats and dependencies; re-examining accountability and human oversight as workflows become more autonomous; and building knowledge and capacity through dialogue and cooperation.