Brokerage Fined for Transferring Client Money to IB and FXCM
- The Hong Kong regulator has fined HPI Forex $255,000 for violating client money segregation rules
The Hong Kong Securities and Futures Commission (SFC) has fined HPI Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Limited $255,000 for failing to adhere to Client Money Client Money Client money refers to the money or margin – which may be any currency in the form of cash, check, draft, or electronic transfer – that a firm receives or holds for a client. Money held by a firm in the form of a stakeholder, which is are not payable on demand or immediately due, also refers to client money. The definition of client money does not apply to money held by businesses that operate in its own name on behalf of a client. Although the client does have to be in agreement before this arr Client money refers to the money or margin – which may be any currency in the form of cash, check, draft, or electronic transfer – that a firm receives or holds for a client. Money held by a firm in the form of a stakeholder, which is are not payable on demand or immediately due, also refers to client money. The definition of client money does not apply to money held by businesses that operate in its own name on behalf of a client. Although the client does have to be in agreement before this arr Read this Term segregation rules. The company has transferred funds from its segregated account to trading accounts at FXCM and Interactive Brokers between March 2013 and April 2014.
The client money mishandling that occurred over a period of 13 months resulted in disciplinary action on the part of the SFC. HPI has admitted to mishandling customer funds for up to $1 million. Apparently, the brokerage transferred the money to overseas brokerage companies Interactive Brokers and FXCM.
According to findings by the Hong Kong regulator, the mishandling originated from a segregated client funds account. The funds were held at local DBS Bank with a total of six transfers being realized over the relevant period.
Client Money Used for Proprietary Transactions
The money was used by the brokerage to execute proprietary transactions. After discovering that the conduct might prove to be a breach of regulatory conditions, the company recalled the funds to the segregated client funds account.
According to an official announcement made by the SFC, HPI’s use of the client funds to execute proprietary transactions represented a major breach. Because the brokerage remitted the money back to DBS Bank after discovering that it might have breached the regulatory framework, the SFC only slapped the company with a $250,000 fine.
Throughout the investigation executed on the part of the Hong Kong regulator, the company was cooperating. The SFC discovered no evidence that clients of HPI have suffered any losses,
“Safe custody of client money and client securities is a fundamental obligation of all intermediaries. Intermediaries are reminded to carefully review their internal control procedures for compliance with the CMR and the Securities and Futures (Client Securities) Rules. The SFC will continue to take action against intermediaries which mis-handle client assets,” the SFC elaborated in an official statement on the matter.
The Hong Kong Securities and Futures Commission (SFC) has fined HPI Forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term Limited $255,000 for failing to adhere to Client Money Client Money Client money refers to the money or margin – which may be any currency in the form of cash, check, draft, or electronic transfer – that a firm receives or holds for a client. Money held by a firm in the form of a stakeholder, which is are not payable on demand or immediately due, also refers to client money. The definition of client money does not apply to money held by businesses that operate in its own name on behalf of a client. Although the client does have to be in agreement before this arr Client money refers to the money or margin – which may be any currency in the form of cash, check, draft, or electronic transfer – that a firm receives or holds for a client. Money held by a firm in the form of a stakeholder, which is are not payable on demand or immediately due, also refers to client money. The definition of client money does not apply to money held by businesses that operate in its own name on behalf of a client. Although the client does have to be in agreement before this arr Read this Term segregation rules. The company has transferred funds from its segregated account to trading accounts at FXCM and Interactive Brokers between March 2013 and April 2014.
The client money mishandling that occurred over a period of 13 months resulted in disciplinary action on the part of the SFC. HPI has admitted to mishandling customer funds for up to $1 million. Apparently, the brokerage transferred the money to overseas brokerage companies Interactive Brokers and FXCM.
According to findings by the Hong Kong regulator, the mishandling originated from a segregated client funds account. The funds were held at local DBS Bank with a total of six transfers being realized over the relevant period.
Client Money Used for Proprietary Transactions
The money was used by the brokerage to execute proprietary transactions. After discovering that the conduct might prove to be a breach of regulatory conditions, the company recalled the funds to the segregated client funds account.
According to an official announcement made by the SFC, HPI’s use of the client funds to execute proprietary transactions represented a major breach. Because the brokerage remitted the money back to DBS Bank after discovering that it might have breached the regulatory framework, the SFC only slapped the company with a $250,000 fine.
Throughout the investigation executed on the part of the Hong Kong regulator, the company was cooperating. The SFC discovered no evidence that clients of HPI have suffered any losses,
“Safe custody of client money and client securities is a fundamental obligation of all intermediaries. Intermediaries are reminded to carefully review their internal control procedures for compliance with the CMR and the Securities and Futures (Client Securities) Rules. The SFC will continue to take action against intermediaries which mis-handle client assets,” the SFC elaborated in an official statement on the matter.