The Efficient Capital Markets Hypothesis (ECMH) was the main theory used in financial markets before the 2007-2009 global financial crisis. It suggested that markets work efficiently by incorporating all available information into prices. Regulation in Hong Kong was based on correcting market failures to support efficient markets. However, research started questioning the assumption of rational market participants. Regulation focused on fixing market failures related to information, competition, and transaction costs. It also aimed to address externalities like systemic risk.