SFC fines FIL Investment Management Limited for regulatory breaches

December 31, 2019 at 03:58 PM

The Securities and Futures Commission (SFC) has reprimanded and fined FIL Investment Management (Hong Kong) Limited (FIMHK) HK$3.5 million for regulatory breaches including unlicensed dealing in futures contracts, delay in reporting the breach to the SFC as well as submitting incorrect information during an application.

The regulator found that between August 2007 and July 2018, FIMHK executed 6,738 trades in futures contracts for its overseas affiliates with an approximate value of US$40 billion without the required license.  FIMHK identified the suspected breach in a review conducted between May and June 2018 but only reported the incident to the SFC in August 2018, after it had obtained external legal advice.

The SFC also found that FIMHK, when applying to the SFC for a new fund authorization in March 2017, submitted an incorrect information checklist based on an outdated template.  As a result, the certain required information was not completed or provided in the checklist submitted to the SFC.

The internal investigation conducted by FIMHK and the reviews performed by an independent reviewer engaged by FIMHK identified certain deficiencies and weaknesses in FIMHK’s internal controls and systems, which suggest that FIMHK did not put in place satisfactory and effective systems and controls to ensure the accuracy of information submitted to the SFC at the relevant time.

FIMHK has been licensed under the Securities and Futures Ordinance (SFO) to dealing in securities, advising on securities, advising on futures contracts asset management regulated activities since 29 March 2005.

You may check our list of the SFC-Regulated Brokers.

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