Hong Kong’s Securities and Futures Fee (SFC) has reprimanded and fined Ruifeng Securities Restricted (RSL) HK$5.2 million over failures referring to its fund administration actions and account opening procedures.
The disciplinary motion follows an SFC investigation into RSL when it acted as an funding supervisor of a Cayman-incorporated fund between 1 July 2019 and 10 December 2020. The investigation discovered that as of Could 2020, RSL invested about 90 per cent of the fund’s US$94.5 million internet asset worth into monetary devices linked to a Mainland property developer even after figuring out numerous draw back elements in its personal evaluation.
It had additionally did not make enough disclosure of fabric details about the fund.
The SFC has additionally suspended the licence of Mr Fang Zhi for 10 months from 1 December 2023 to 30 September 2024 for failing to discharge his duties as a accountable officer of RSL answerable for its fund administration actions.
Particularly, RSL did not have adequate threat administration measures to make sure the fund was not uncovered to extreme dangers, and be sure that its selections to put money into sure fastened earnings merchandise for the fund had been cheap and within the fund’s finest curiosity in gentle of all related elements.
The corporate has additionally did not make enough disclosure of details about the fund’s funding holdings which had been needed for the fund buyers to have the ability to make an knowledgeable judgment about their funding into the fund.
As well as, the corporate has did not determine, stop, handle and minimise the battle of curiosity arising from its underwriting actions and disclose the battle to the fund’s buyers; and
make sure the accuracy of a illustration made on behalf of the fund to a notes issuer in a subscription settlement.
The SFC’s investigation additionally discovered that RSL had did not undertake acceptable account opening procedures for verifying the identities of purchasers who opened their accounts on a non-face-to-face foundation by way of RSL’s cellular utility between 26 November 2018 and 31 July 2020.
The regulator considers that RSL’s failures in relation to the administration of the fund are attributable to Fang’s failure to discharge his duties as a accountable officer and a member of the senior administration of RSL.
In deciding the sanctions, the SFC took into consideration all related circumstances, together with RSL’s remedial actions, RSL and Fang’s cooperation with the SFC in resolving the SFC’s considerations and their in any other case clear disciplinary report.
