ICAC and SFC Investigations: An Overview

Introduction

Hong Kong has two specialist investigative bodies whose powers, procedures, and working methods differ significantly from those of the ordinary police. The Independent Commission Against Corruption (ICAC) investigates corruption and related offences. The Securities and Futures Commission (SFC) is the independent regulator of Hong Kong's financial markets, responsible for investigating market misconduct and related regulatory breaches.

What unites them is this: their investigative powers significantly exceed those of the ordinary police — most notably, their powers to compel answers to questions and to compel production of documents. The right to silence that applies in ordinary criminal investigations does not apply in certain ICAC and SFC procedures. Where those compulsion powers apply, a specific use-immunity protection attaches to the compelled answers.

This article describes, in general terms: the role of each body, typical investigation stages, how the compulsion powers operate and their limits, and general considerations for a person (whether already arrested or not) facing such an investigation. This article does not provide specific case strategy — which must be assessed by a solicitor with experience in the area.

The Independent Commission Against Corruption (ICAC)

Role

Established in 1974, the ICAC is an independent body reporting directly to the Chief Executive. Its principal focus is corruption and bribery. Its legal framework comprises:

• The ICAC Ordinance (ICACO) — establishing the ICAC and setting out its general investigative powers
• The Prevention of Bribery Ordinance (POBO) — creating offences relating to bribery and acceptance of advantages by public officials and private sector employees, and conferring the ICAC's specialised investigative powers
• The Elections (Corrupt and Illegal Conduct) Ordinance — creating offences relating to corrupt practices in elections

In addition, where the ICAC's investigation uncovers non-corruption-related criminal conduct (for example, fraud, theft, or perverting the course of justice), the ICAC may extend its investigation to those offences as well.

Principal Powers

The ICAC's investigative powers include:

• Arrest and detention — under the ICACO, ICAC officers hold powers of arrest and detention comparable to the police
• Search and seizure — on application to a magistrate for a search warrant, the ICAC may enter premises and seize documents, items, and electronic records
• Bail — the ICAC itself may grant on-the-spot bail, or bring the arrested person before a magistrate
• Travel document surrender orders — on application to a magistrate, the ICAC may require a subject to surrender all travel documents for a period of up to 6 months (whether or not the subject has been charged)
• Asset declaration orders — under the POBO, the ICAC may require a subject to declare assets, income, and expenditure. Where the declared standard of living or assets visibly exceed what the subject's known lawful income can explain, a standalone offence under the POBO may arise
• Statutory non-disclosure offence — Section 30 of the Prevention of Bribery Ordinance creates a standalone statutory criminal offence that applies automatically (by operation of law, not by court order): any person who knows an ICAC investigation is taking place and discloses the identity of the subject or details of the investigation, without lawful authority or reasonable excuse, commits an offence. The provision applies automatically to subjects, third parties, and the media. Breach of section 30 is itself a distinct criminal offence

The ICAC cannot itself prosecute. Investigation outcomes are referred to the Department of Justice, which makes independent prosecution decisions — not necessarily accepting the ICAC's recommendation.

A Typical Subject's Experience

A typical ICAC investigation may unfold as follows:

• Dawn raid. ICAC officers arrive early at the subject's home or office, execute a search warrant, and seize documents, computers, and mobile phones. During the search, the subject may request a solicitor's attendance (the solicitor should arrive as soon as reasonably possible).
• Arrest. Either after the search or at a later stage, the subject may be formally arrested and taken to ICAC headquarters for questioning.
• Questioning. ICAC interviews follow strict audio-visual recording procedures. The subject retains the right to silence in ordinary questioning. Where specific POBO compulsion provisions are engaged, the subject may be compelled to answer on those specific matters.
• Bail or detention. The 48-hour rule applies — decisions on bail or on bringing the subject before court follow.
• Prosecution decision. On completion of the investigation, the matter is referred to the Department of Justice for the prosecution decision. This stage can take months or more.

The Securities and Futures Commission (SFC)

Role

Established in 1989, the SFC is an independent statutory body regulating Hong Kong's securities and futures markets. Its principal investigative targets include:

• Market misconduct — insider dealing, market manipulation, false trading, false or misleading disclosures, fraudulent transactions
• Breaches of registration requirements — by unregistered practitioners, brokers, and fund managers
• Breaches of fund management standards — for example, conflicts of interest, handling of client assets
• Breaches of listing rules — working with the Stock Exchange of Hong Kong on listed-company disclosures

Principal Powers

The SFC's powers under the Securities and Futures Ordinance (SFO) include:

• Notice of interview — a compulsory notice requiring the recipient to attend for questioning. Non-attendance and non-answering are not permitted.
• Notice for production — requiring the recipient to produce documents, records, and electronic data relevant to the investigation
• Search warrants — in more serious cases, on application to a magistrate, entering premises, searching, and seizing documents
• Asset freezing — applying to the court to freeze suspect funds, preventing transfer or dissipation
• Bans on market activity — applying to the court to prevent a suspect from continuing securities-related activities
• Disciplinary action — against registered persons (brokers, fund managers), including fines, licence revocation, and public reprimand. This disciplinary track is independent of criminal prosecution

The SFC cannot itself bring criminal prosecutions. Criminal prosecution for market misconduct is conducted by the Department of Justice. However, the SFC may itself bring civil proceedings (applying to the court for damages, injunctions, disciplinary orders), and may pursue proceedings before the Market Misconduct Tribunal.

Compulsion Powers — The Key Departure from Ordinary Procedure

The single most important procedural distinction from ordinary police investigations is the power to compel answers. In ordinary criminal investigations, an arrested person has a right to silence — the right to refuse to answer. In certain ICAC and SFC procedures, that right is modified:

ICAC. In ordinary ICAC questioning, the subject retains the right to silence. However, the POBO's asset declaration orders and certain other statutory disclosure duties override the right to silence — refusal to declare can itself be an offence.

SFC. A person receiving a notice of interview must attend and must answer questions. Refusal, or making a false statement, is itself an offence. This power is significantly broader than the ICAC's specific POBO compulsion — the SFC can compel answers on almost any matter relevant to its investigation, with no right of silence for the interviewee.

Use immunity. To balance these compulsion powers, the statutes provide protections — but the protection is not automatic. Under section 187 of the Securities and Futures Ordinance, use immunity attaches to an answer only where the person has expressly claimed the privilege against self-incrimination before answering that question. Claiming the privilege means the answer cannot be admitted as evidence against the same person in subsequent criminal proceedings. Whether a person is informally characterised as a "suspect" or a "witness" does not itself trigger the protection — a person who is substantively a suspect may lose the protection if they fail to claim the privilege at the right moment, while a person called as a witness may gain it by claiming properly.

The protection carries further important limits:

• Use immunity, not transactional immunity. Even where an answer is protected, the prosecution may still prosecute the same underlying conduct — provided it does not rely directly on that answer as evidence.
• Derivative evidence may still be admissible. Evidence found as a result of a compelled answer (for example, documents located at a particular address, or banking records identified through the answer) may, in some circumstances, still be admissible.
• Perjury or obstruction. A false statement deliberately given in a compelled interview can give rise to a fresh criminal offence (perjury, obstruction of justice), which is not covered by the use immunity.

Practical implication: When, on which questions, and how precisely the privilege is claimed can directly determine whether the answer is protected. This is a highly technical judgement and very difficult to make for the first time in the interview itself — which is the core reason comprehensive solicitor preparation before attending a compelled interview is essential. Even where answers are ultimately protected, they may still guide the regulator towards other evidence capable of supporting a prosecution.

Common Considerations for Subjects of Investigation

The following are matters a person facing ICAC or SFC investigation commonly considers (this is not advice on any specific matter):

• Engage a solicitor immediately. Before any questioning, search, or document production, consult a solicitor with experience in this field to understand the specific position and the power being invoked.
• Understand that use immunity depends on claiming the privilege — not on informal status labels. A common misconception is that "suspects" automatically get use immunity while "witnesses" do not — this is wrong. Under SFO section 187, use immunity attaches only where the interviewee properly claims the privilege against self-incrimination before answering. A person called as a witness may still touch on sensitive matters; a person who is substantively a suspect may lose the protection by failing to claim the privilege at the right moment. A solicitor can assess the potential risk associated with each line of questioning in advance and prepare specific guidance on when and how to claim the privilege.
• Preserve all relevant documents. Destroying, altering, or hiding documents in the face of a non-disclosure or search order is itself a criminal offence. Destroying documents even before an investigation is open, if later shown to be designed to obstruct the investigation, may amount to perverting the course of justice.
• Know the rights during a search. During a search, a subject may request a solicitor's attendance, may ask to see a copy of the search warrant, may reasonably challenge the warrant's scope, may insist on a proper record of items seized, and should receive a list of items seized.
• Understand the scope of the statutory non-disclosure offence. Section 30 of the POBO applies automatically — the subject must understand clearly who can and cannot be told. Disclosure to a solicitor handling the matter generally falls within lawful authority (and is protected by legal professional privilege); whether a spouse, business partner, or colleague may be told needs to be assessed on the specific facts. Misjudgement can give rise to independent criminal liability under section 30.