SFC fines Ninety One Hong Kong Limited HK$1.4m for unlicensed futures trading
Statement of Disciplinary Action
SFC reprimands and fines Ninety One Hong Kong Limited $1.4 million for unlicensed futures trading
Issue date: 2023-04-12 16:30:00
The Securities and Futures Commission (SFC) has reprimanded and fined Ninety One Hong Kong Limited (NOHK) $1.4 million for dealing in futures contracts without the required licence (Note 1).
The SFC found that between April 2014 and January 2020, NOHK executed 4,864 trades in futures contracts for portfolios managed by its three overseas affiliates without the required licence, in breach of the SFO and the Code of Conduct (Notes 2 & 3).
In deciding the sanction, the SFC took into account that:
- there is no evidence to suggest that NOHK’s failure was intentional or deliberate;
- there is no evidence of any client loss as a result of NOHK’s futures trading activities;
- NOHK reported the incident to the SFC shortly after identifying the suspected breach and ceased its futures trading activities thereafter;
- NOHK cooperated with the SFC in resolving the SFC’s concerns; and
- NOHK has an otherwise clean disciplinary record.
- NOHK has been licensed under the Securities and Futures Ordinance (SFO) to carry on Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities since 9 April 2014.
- NOHK executed the trades without a Type 2 (dealing in futures contracts) licence. Under section 114 of the SFO, no person shall carry on a business in a regulated activity or hold himself out as carrying on a business in a regulated activity without a licence or registration for the regulated activity.
- General Principle 2 (Diligence) of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (Code of Conduct) requires a licensed corporation to act with due skill, care and diligence, in the best interests of its clients and the integrity of the market. General Principle 7 (Compliance) and paragraph 12.1 (Compliance: in general) of the Code of Conduct require a licensed corporation to comply with, and implement and maintain measures appropriate to ensure compliance with, the relevant regulatory requirements.
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