HK regulator fines Swiss-Asia Asset Management $3 million
Hong Kong’s Securities and Futures Commission (SFC) has reprimanded and fined Swiss-Asia Asset Management (HK) Limited $3 million for internal control failings and regulatory breaches in relation to the monitoring of trading activities in discretionary accounts and record keeping.
The disciplinary action follows an SFC investigation into the internal controls of Swiss-Asia after a client’s complaint.
The complaint centred on option trading by a former licensed representative of Swiss-Asia in the client’s discretionary account. The client claimed that some of the trades were much riskier than agreed and fell outside the scope of her asset management mandate agreement with Swiss-Asia between April 2015 and August 2016.
The SFC’s investigation found deficiencies in internal controls of Swiss-Asia, in that it failed to properly monitor the trading activities in the client’s discretionary account for around 15 months. The company also did not have procedures in place to ensure proper supervision of the operation of discretionary accounts. It also failed to maintain proper records of its compliance checks on discretionary accounts.
In deciding the sanction, the SFC took into account a variety of factors, including the duration of Swiss-Asia’s failures, Swiss-Asia’s cooperation in resolving the SFC’s concerns, and the firm’s otherwise clean disciplinary record.