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SFC reprimands and fines BOCOM International Securities $19.6 million

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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