HK watchdog fines Lion Futures Restricted $2.8M for regulatory breaches

Hong Kong’s Securities and Futures Fee (SFC) has reprimanded and fined Lion Futures Restricted (LFL) $2.8 million for failures in complying with anti-money laundering and counter-terrorist financing (AML/CFT) and different regulatory necessities between Might 2017 and July 2019.

The SFC’s investigation discovered that LFL didn’t conduct any due diligence on the shopper provided programs (CSSs) utilized by 5 shoppers for putting orders in the course of the materials time. In consequence, LFL was not able to correctly assess and handle the cash laundering and terrorist financing and different dangers related to using CSSs by its shoppers.

As well as, the SFC discovered that LFL’s failure to place in place an efficient ongoing monitoring system to detect suspicious buying and selling patterns in shopper accounts resulted in its failure to detect 1,098 self-matched trades in 5 shopper accounts.

The regulator considers that LFL’s programs and controls had been insufficient and ineffective, and failed to make sure compliance with the Anti-Cash Laundering and Counter-Terrorist Financing Ordinance, the Guideline on Anti-Cash Laundering and Counter-Terrorist Financing (AML Guideline) and the Code of Conduct.

In deciding the disciplinary sanctions in opposition to LFL, the SFC has taken into consideration that LFL’s failures to diligently monitor its shoppers’ actions and put in place ample and efficient AML/CFT programs and controls are critical as they may undermine public confidence in, and harm the integrity of, the market.

LFL has taken remedial measures to reinforce its inner programs and controls for steady monitoring and figuring out suspicious transactions.

The regulator famous {that a} sturdy deterrent message must be despatched to the market that such failures are usually not acceptable.

LFL cooperated with the SFC in resolving the SFC’s considerations.