Hong Kong’s Securities and Futures Commission (SFC) has reprimanded and fined Credit Suisse Securities (Hong Kong) Limited, the local unit of Switzerland-headquartered investment bank, HKD 2.1 million (around $270,866) for regulatory breaches.
As announced on Monday, failure in the electronic trading system of the bank resulted in regulatory breaches.
The regulator detailed that the investment bank submitted 16,935 erroneous market-making quotes to the market on February 28 last year in less than 10 minutes. The erroneous quotes resulted in the Execution of 8,042 stock options trades.
“The incident was caused by a logic error in the symbol mapping program used by CSSHK, in its capacity as a stock options market maker, in generating market making quotes,” the SFC explained.
The regulator further detailed that the company’s existing internal controls failed to prevent the failures in its Trading Platform .
“In deciding the sanction, the SFC took into account all relevant circumstances, including the prompt remedial actions taken by CSSHK following the incident and CSSHK’s cooperation with the SFC in resolving the SFC’s concerns,” the announcement added.
Regulators Are Getting Strict
Ahead of this latest penalty, the SFC slapped a fine of $350 million on the Asian unit of Goldman Sachs for its involvement in Malaysia’s 1MDB scandal. Goldman faced a $2 billion fine in the United States and $2.5 billion in Malaysia for the same scandal.
Meanwhile, the Hong Kong regulator remains vigilant of any breaches by the financial institutions and actively takes action against them.
Credit Suisse has a history of regulatory lapses and was fined multiple times in the United States.
In September, the US financial markets watchdog fined Credit Suisse $600,000 for failing to submit some mandatory trading information. In 2016, Credit Suisse consented to a cease and desist order, censure, and a penalty of $4,250,000 slapped by the financial regulator for similar lapses.
