The Securities and Futures Commission (SFC) has released its first-ever AI readiness survey, indicating that most large financial firms in Hong Kong are already leveraging artificial intelligence (AI) across their operations, with expectations of increased adoption. Conducted between July and August this year, the survey covered 20 major financial firms and their 78 affiliated corporations, accounting for over 75% of securities transactions reported by licensed corporations in the six months ending June. Ninety-five percent of surveyed firms anticipate a rise in AI usage within the next 12 months, with 90% already integrating AI tools into their internal systems. AI use is now extended to front-, middle-, and back-office activities. AI adoption in Hong Kong's capital market, according to SFC CEO Julia Leung, is growing rapidly in both speed and scale, with agentic AI – capable of autonomously determining and executing steps to achieve an objective – gaining traction. Thirty percent of surveyed firms are already using agentic AI in their operations, while a quarter are piloting it with varying degrees of autonomy and human involvement. However, Leung urged caution, drawing an analogy to children at home who may go beyond set boundaries and cause disruptions. Recognizing that frontier AI models and agents have developed more quickly than regulations, Leung highlighted the need for regulatory catch-up. The SFC stated that the findings will guide its supervisory approach to AI, focusing on key areas such as investor protection, cybersecurity, and operational resilience, as well as ensuring effective governance.