An increase in illegal financial brokerage providers has prompted yet another warning from Hong Kong’s securities watchdog. After receiving a number of complaints from investors, the Securities and Futures Commission (SFC) has issued a statement cautioning the public about Huanying International Limited, which has been offering trading services without being authorized to do so.
Huanying International is a multi-asset broker that offers to trade in stocks, forex, and other financial derivatives. The company provides its FX services through a separate brand called Circleforex.
Under the HK laws, selling securities to anyone who is not a client of a regulated firm is in general prohibited. In addition, brokers can only call existing clients to sell investment plans or related services.
Huanying is the latest FX broker to be included on the watchdog’s warning list, which comes in parallel with a statement on its website warning residents about the increase in similar solicitations. The regulator’s warnings are aimed at protecting investors from using an intermediary or buying any assets without fully understanding its background.
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SFC warns of crypto securities
The SFC routinely warns of scams operating in Hong Kong, one of the region’s paramount financial markets.
Presently, the SFC’s alert list features the names of businesses that have come to the attention of the watchdog because they are unlicensed in Hong Kong and are believed to be or to have been, targeting Hong Kong investors, or claim to have an association with Hong Kong.
Most recently, the Hong Kong’s watchdog warned about the risks of participating in initial coin offerings (ICOs), with a focus on the securities token offerings (STOs), saying many of the projects adopting this fundraising method are dubious, if not downright frauds.
The authority notes that STOs are usually structured to escape regulatory scrutiny. The SFC also pushes for caution amidst high-risk levels of hacking and fraud in token sales and cryptocurrency investments.