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SFC bans Chu Chun Wai for seven months for supervisory failures

Issue date: 2021-12-30 16:30:00

The Securities and Futures Commission (SFC) has prohibited Mr Chu Chun Wai, a former responsible officer (RO) and executive director of Zhonghui International Futures Company Limited (ZIFC), for seven months from 29 December 2021 to 28 July 2022 (Notes 1 & 2).

The SFC found that between May 2017 and July 2018, Chu failed to discharge his duties as an RO and a member of the senior management of ZIFC.  Specifically, he failed to ensure ZIFC’s maintenance of appropriate standards of conduct and adherence to proper procedures and to properly manage the risks associated with ZIFC’s business.

Chu’s failures were related to the:

• use of client supplied systems (CSSs) by ZIFC clients for placing orders (Notes 3 & 4);
• approval of client requests for setting up third party operated accounts; and
• monitoring of suspicious transactions in client accounts.

In deciding the sanction, the SFC took into account Chu’s cooperation with the SFC in resolving the SFC’s concerns and his otherwise clean disciplinary record.

End

Notes:

1. Chu was accredited to ZIFC and approved to act as its RO for Type 2 (dealing in futures contracts) regulated activity from 4 November 2016 to 9 June 2021.  Chu is currently not licensed by the SFC.
2. Chu was ZIFC’s Manager-In-Charge of the (i) Overall Management Oversight function from 11 September 2017 to 1 January 2021; (ii) Risk Management function from 15 July 2017 to 10 September 2017 and from 9 April 2018 to 9 June 2021; and (iii) Key Business Line and Operational Control and Review functions from 15 July 2017 to 10 September 2017.
3. CSSs are trading software developed and/or designated by the clients that enable them to conduct electronic trading through the internet, mobile phones and other electronic channels.
4. The CSSs were connected to ZIFC’s broker supplied system (BSSs) through application programming interface (a set of functions that allows applications to access data and interact with external software components or operating systems).  BSSs are trading facilities developed by exchange participants or vendors that enable the exchange participants to provide electronic trading services to investors through the internet, mobile phones, and other electronic channels.
5. The SFC’s disciplinary action against Chu is related to its ongoing disciplinary action against ZIFC.  The SFC will not disclose the details of its disciplinary action against Chu until the conclusion of its action against ZIFC.

News captured as of:2021-12-30 16:35:00

Source: SFC