The Securities and Futures Commission of Hong Kong has reprimanded and fined UBS Securities Asia Limited (UBS Securities), a total of $4.5 million, for their failings with regard to trading activities.
More specifically, the allegations claim that UBS Securities did not comply with regulatory requirements of implementing sufficient controls to record transactions and client consents, with respect to the company’s facilitation of trading activities.
Details of the Violations
Moreover, the company also failed to comply in providing the SFC with relevant information regarding their client facilitation trades. These suspicions led to a comprehensive inspection, followed by a thorough investigation, spearheaded by the SFC.
The investigation proved that UBS Securities was only able to provide the SFC with roughly half of its consent record pertaining to client facilitation trades, conducted during a period spanning from June 2015 through June 2016.
Just as any other licensed financial services firm, UBS Securities is required by the SFC to maintain comprehensive records of their activities, as well as to assure the adequate resources and procedures are in place to assure the proper facilitation of its business and financial operations.
As part of the resolution process, which ended with the SFC reprimanding and issuing a $4.5 million fine against UBS Securities Asia Limited, the SFC considered various circumstances in its decision.
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First, the SFC noted in its statement on this matter, that UBS Securities fully cooperated with the SFC, in an effort to reach a swift and just resolution, which would put the incident behind the company. As part of its cooperative efforts, UBS Securities appointed a reviewer to assure the full and proper transference of company information, as requested by the Hong Kong regulator.
UBS Securities also conducted a supervisory review, in order to make sure that client consents and their respective process is conducted properly and in accordance with regulatory confinements.
Additionally, the Board of Directors also worked to ensure the establishment of acceptable controls, with the goal of maintaining records of the company’s trading facilitation.
Recent Activity by the SFC
The SFC has been highly active in recent months, addressing issues associated with a lack of adherence to regulatory requirements.
In a similar incident, albeit for different reasons, the SFC reprimanded and issued a fine against Interactive Brokers HK in February, due to internal control failures that occurred in 2015 and 2016.
As reported by Finance Magnates earlier this month, Interactive Broker HK also saw some of its accounts get placed under restrictions, for their part in insider trading allegations, in the shares of Bloomage BioTechnology Corporation.
Overall, the SFC has also maintained its role of issuing various types of trading and investment licenses, as well as assessing regulatory environments, imposing fines and penalties, and even issuing market bans in cases of extreme misconduct.