繁

SFAT affirms SFC decision to reprimand and fine I-Access Investors Limited $600,000 over breach of the Code of Conduct

Issue date: 2023-03-14 16:33:50

The Securities and Futures Commission (SFC) has reprimanded and fined I-Access Investors Limited (I-Access) $600,000 for breach of the Code of Conduct after the Securities and Futures Appeals Tribunal (SFAT) upheld the SFC’s disciplinary action against it (Notes 1 & 2).

The SFC’s disciplinary action arose from I-Access’s response to an internal system test conducted by Hong Kong Exchanges and Clearing Limited (HKEX) on 6 April 2015.  The system test resulted in test data in the form of simulated orders, trade and securities prices being transmitted to clients of HKEX’s market data system, including I-Access (Note 3).

The SFC found that I-Access in turn disseminated such data in its own system when they should have been disregarded.

This resulted in the incorrect triggering of 27 stop loss sell orders by 12 clients and their executions on the following trading day.

I-Access, however, did not take the initiative to promptly notify the affected clients of the incident and make appropriate compensation offers to them.

The SFC is of the view that I-Access was in breach of the Code of Conduct by failing to act with due skill, care and diligence, and in the best interests of its clients.

In deciding the disciplinary sanction, the SFC took into account that:

• this appears to be an isolated incident;
• I-Access has changed the programme design of its system since the incident to avoid recurrence of similar incident; and
• I-Access has an otherwise clean disciplinary record.

End

Notes:

1. I-Access is licensed under the Securities and Futures Ordinance to carry on business in Type 1 (dealing in securities) regulated activities.  It has now ceased carrying out any regulated activities.
2. Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (Code of Conduct).
3. HKEX launched the HKEX Orion Market Data Platform for its securities market (OMD-C) in September 2013.  As stipulated in the “Interface Specifications of HKEX Orion Market Data Platform Securities Market and Index Datafeed Products (OMD-C)” (version 1.9), HKEX “may perform system testing on Saturdays, Sundays or days when OMD-C is not in operation.  Clients should treat data transmitted via OMD-C on those days as non production data and disregard them.”
4. Please see the SFAT’s determination for SFAT Application No. 5 of 2021 on its website.

Source: SFC