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SFC issues restriction notice to a broker to freeze client account linked to suspected insider dealing

Issue date: 2022-08-17 16:40:45

The Securities and Futures Commission (SFC) has issued a restriction notice to Bright Smart Securities International (H.K.) Limited (Bright Smart), prohibiting it from disposing of or dealing with certain assets held in a client account that holds proceeds of suspected insider dealing (Notes 1, 2 & 3).

Bright Smart has fully cooperated with the SFC and is not the subject of the SFC’s investigation into suspected insider dealing.  The restriction notice does not affect Bright Smart’s operations or its other clients.

The SFC considers that the issue of the restriction notice, which prevents dissipation of proceeds of suspected insider dealing held in the account, is desirable in the interest of the investing public or in the public interest.

The SFC’s investigation is continuing.

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Notes:

1. The restriction notice is issued pursuant to sections 204 and 205 of the Securities and Futures Ordinance (SFO).
2. The restriction notice prohibits Bright Smart, without the SFC’s prior written consent, from disposing of or dealing with, or assisting, counselling or procuring another person to dispose of or deal with, any assets in any way in the account up to a certain amount, including: (i) entering into transactions in respect of any securities; (ii) processing any withdrawals or transfers of securities and/or cash on the instructions of any authorized person of the account or any person acting on their behalf; (iii) disposing of or dealing with any securities and/or cash on the instructions of any authorized person of the account or any person acting on their behalf; and (iv) assisting another person to dispose of or deal with such assets in the account in a manner as specified above.  Bright Smart is also required to notify the SFC upon receipt of any instructions regarding the prohibitions specified above.
3. Bright Smart is a corporation licensed under the SFO to carry on Type 1 (dealing in securities), Type 4 (advising on securities) and Type 7 (providing automated trading services) regulated activities.

Source: SFC