December 8, 2016: HK SFC relaunches Enforcement Reporter

 

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Update on the SFC’s enforcement approach

8 Dec 2016

The Securities and Futures Commission (SFC) today relaunched its Enforcement Reporter as a biannual publication which aims to provide the market with updates on the SFC’s key enforcement priorities (Note 1).

The new issue published today focuses on corporate fraud and misfeasance as well as anti-money laundering internal controls.

 “Listed companies-related fraud and misfeasance have wiped out billions in market capitalisation and caused significant damage to the integrity and reputation of our markets,” said Mr Thomas Atkinson, the SFC’s Executive Director of Enforcement. “The SFC has formed a specialised team to focus on these cases.”

In addition, the SFC will adopt a holistic approach to identify systemic weaknesses at the corporate group level and focus its enforcement actions on companies and corporate groups with multiple failings.

 “The SFC values timely, open and transparent disclosure of misconduct. To encourage more cooperation, the SFC may notify parties under investigation of its intention to take enforcement action,” Mr Atkinson added. “In response, the parties and their legal advisers would have an opportunity to make submissions which may be on the record.”

Other SFC enforcement priorities discussed in the newsletter include market misconduct in the Growth Enterprise Market and surveillance of untoward market behaviour in real time and retrospectively.

The newsletter is available on the SFC website. The public may subscribe by filling out the form available under the  “Subscribe” link.

End

Note:

  1. The SFC published the first series of its Enforcement Reporter from 2002 to 2011.

And here’s the section on AML:

 

SFC licensees are vulnerable to being used to launder the proceeds of crime and to finance terrorism. We rely on licensees to implement effective anti-money laundering (AML) measures to prevent and detect these criminal activities and we expect them to take their AML responsibilities seriously. Licensees and their senior management must ensure their AML internal controls comply with the requirements under the Anti-Money Laundering and Counter-Terrorist Financing (Financial Institutions) Ordinance and the SFC Guideline on Anti-Money Laundering and Counter-Terrorist Financing.

Satisfactory completion of customer due diligence before commencing each business relationship is particularly important, as thorough customer due diligence is the cornerstone of effective AML controls.

A specialised team is investigating a number of cases involving licensed brokers whose AML internal controls are suspected to be inadequate and we may bring enforcement proceedings. We will impose tough sanctions on licensees if our investigations confirm regulatory breaches. 

Links:

HK SFC Notice

Enforcement Reporter site

December 2016 Enforcement Reporter

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