CLSA Premium Limited, a Hong Kong-headquartered broker, announced the decision to terminate its margin dealing business and focus on its new healthcare business, which it entered in mid-2022.

CLSA Shareholders Approves Business Changes

The decision came after the company’s annual general meeting last week, in which the shareholders unanimously voted for the proposed changes in the company’s business areas.

“Since the Group launched the initial exploration into the healthcare business in mid-2022, the Group has generally seen [a] positive outcome,” the notice published by the company highlighted last week. “In the first quarter of 2023, [the] large majority of the Group’s revenue and profit [is] contributed by the healthcare business.”

A Troubled Broker

CLSA, previously known as KVB Kunlun, has been in trouble for years. Besides its Hong Kong headquarters, the company also had a presence in Australia and New Zealand.

The New Zealand subsidiary of CLSA was initially flagged by the Kiwi regulator in 2014 for violations in business practices. The regulator identified further lapses in 2018, even after the broker had made improvements. These violations led to a monetary fine of NZ$770,000 on CLSA’s New Zealand subsidiary for serious anti-money laundering breaches following several additional licensing conditions.

CLSA already suspended its operations in Australia and New Zealand last year. Since then, it has only offered margin dealing and bullion trading under the Hong Kong-registered entity.

“The Board considered there to be limited prospect for the Group’s margin dealing and the bullion trading business (collectively, the 'Margin Dealing Business') to obtain new clients and to improve its performance. On that basis, the Board considered that the resources and effort deployed in the Margin Dealing Business could potentially be better utilized in the healthcare business, and has decided to suspend the operation of the Margin Dealing Business,” the company’s notice noted.

Earlier, CLSA dodged multiple wind-down requests brought by one of its major shareholders, KVB Holdings, which believed that the broker demonstrated an insufficient level of operations and was in a poor financial situation.