SFC reprimands and fines BOCI Securities HKD10 million

March 21, 2019 at 06:12 PM

The Securities and Futures Commission (SFC) has reprimanded and fined BOCI Securities Limited (BSL) HK$10 million over BSL’s internal system and control failures in its investment product selling practices.

BOCI Securities Limited is licensed under the Securities and Futures Ordinance (SFO) to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities) and Type 5 (advising on futures contracts) regulated activities.

The disciplinary action followed an investigation which found that BSL had failed to comply with various regulatory requirements concerning client profiling, product due diligence and suitability assessment in its sale and distribution of investment products, including bonds listed under Chapter 37 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited.

The company specifically failed to do the following:

– properly assess and determine its clients’ risk tolerance level and investment strategy in certain cases;

– ensure the investment recommendations and/or solicitations made to its clients were reasonably suitable in all the circumstances;

– ensure the clients had sufficient net worth to be able to assume the risks and bear the potential losses of trading in derivative products and/or leveraged transactions;

– conduct proper and adequate product due diligence on certain investment products.

(SFC) of Hong Kong is the independent statutory body charged with regulating the securities and futures markets in Hong Kong. The SFC is responsible for fostering an orderly securities and futures markets, to protect investors and to help promote Hong Kong as an international financial center and a key financial market in China.

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