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SFC reprimands and fines Taiping Securities (HK) Co Limited $1.3 million for internal control failures over employee dealings

Issue date: 2023-06-19 16:30:00

The Securities and Futures Commission (SFC) has reprimanded and fined Taiping Securities (HK) Co Limited (TSCL) $1.3 million for internal control failings in relation to employee dealings between 1 January 2016 and 30 November 2018 (Note 1).

The SFC’s investigation found that TSCL failed to put in place adequate and effective internal controls over monitoring of employee dealings.  In this connection, the senior management, the compliance department and the responsible officer (RO) responsible for monitoring employee dealings did not have a clear and consistent understanding of their roles and duties, nor did TSCL maintain any record of their reviews on employees’ transactions.  There was no independent review and approval of the personal transactions of the RO, including 293 transactions that exceeded the trading limit prescribed for his personal account.

The SFC also found that TSCL failed to communicate its personal dealing policy applicable during the relevant period to all employees and ensure that they understood and followed its policy.

In deciding the disciplinary sanctions against TSCL, the SFC took into account all relevant circumstances, including TSCL’s remedial measures to enhance its internal systems and controls on employee dealings and its otherwise clean disciplinary record.

End

Note:

1. TSCL is licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) regulated activity.

News captured as of:2023-06-19 16:35:00

Source: SFC