The SFC announces on 20th April 2020 that it has reprimanded and fined BOCOM International Securities (which is licensed to conduct Types 1, 2, 4 and 5 regulated activities) HK$19.6 million for internal control failures and various regulatory breaches (please see https://www.sfc.hk/edistributionWeb/gateway/EN/news-and-announcements/news/enforcement-news/doc?refNo=20PR36).
It is noteworthy that a SFC licensed corporation should always take precautionary steps to ensure the relevant internal control and compliance policies to be put in place, properly implemented and enforced in order to avoid occurrence of the following situation, to name but a few:-
Failing to ensure compliance with the Guideline on Anti-money Laundering and Counter-terrorist Finaning
Failing to identify third party deposits made into client accounts by way of cheques and bank transfers
Failing to document and strictly enforce a clear margin lending and margin call policies
Failing to keep records of written explanation for departure from the margin lending policy, and appropriately detailed records of margin call history
Failing to ensure that margin calls have reached clients
Failing to promptly collect from clients amount due as margin
Failing to objectively set and enforce the credit limits for margin clients
Failing to segregate the key duties and functions for the application and approval of liquidation suspension and making of margin calls
Failing to ensure that transactions conducted in client accounts were properly authorised
Failing to properlty confirm client identities and transaction details in trade confirmation
Failing to report its representatives' failures to record order instructions to the SFC immediately
Failing to ensure that a client complaint was adequately investigated and promptly responded to.
If you wish to learn more about how to formulate and implement the relevant internal control and compliance policies, please visit https://www.mokco.com.hk/get-a-quote or feel free to email your inquiry to info@mokco.com.hk. We will get in touch with you shortly.
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