SFC Issues Restriction Notices to Brokers for Client Misconduct

The Securities and Futures Commission (SFC) of Hong Kong has issued its first announcement for the year this Friday, stating that it has issued restriction notices to three brokers as part of a wider investigation into market misconduct.

The notices prohibit the firms, which are Fulbright Securities Limited, Futu Securities International (Hong Kong) Limited and Gong Ping Securities Limited (brokers), from accepting or placing orders listed on derivative warrants in client accounts that are linked to suspected market misconduct.

While the SFC does not identify who it suspects to have committed this market misconduct, in the statement released today it does highlight that it is not investigating the three brokers in question. In fact, the regulator states that the three companies have cooperated with its ongoing investigation.

Specifically, the restriction notice forbids the brokers from: “accepting instructions to place or placing, through the client accounts or on behalf of the client holding the accounts, any buy or sell order on any derivative warrants listed on the stock market operated by the Stock Exchange Stock Exchange A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin A stock exchange, also known as a securities exchange or bourse represents is a facility where stockbrokers and traders can buy and sell securities.This includes shares of stock, bonds, exchange-traded funds (ETFs), or other financial instruments. By extension, stock exchanges can also provide facilities for the issue and redemption of such securities and instruments and capital events including the payment of income and dividendsStock exchanges have developed into a permanent fixture in the fin Read this Term of Hong Kong Limited” without the SFC’s prior written consent.

The SFC also assures clients of the broker’s that the restrictions will not affect their operations or their other clients who are not suspected of market misconduct. According to the statement, the watchdog believes the restriction notice is “desirable” when considering the interest of the public.

The notices were issued under section 204 of the Securities and Futures Ordinance (SFO). All three brokers are regulated and licensed under the SFO to conduct financial activities within Hong Kong.

SFC reportedly looking further into crypto

In addition to keeping an eye out for market misconduct, the SFC is also reportedly going to be cracking down on cryptocurrency products in the coming months. According to a report by Japanese outlet Nikkei, the regulator is planning to implement a new licensing regime.

Specifically, the regime will require firm’s whose holdings are made up of more than 10 percent worth of Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term; then they will need to obtain a specific license from the SFC, as Finance Magnates reported.