HK SFC Fines Guosen Securities (HK) $2.8M over Regulatory Breaches

The Securities and Futures Commission (SFC) has reprimanded and fined Guosen Securities (HK) Brokerage Company, Limited (Guosen) $2.8 million for regulatory breaches in relation to the handling of client assets and the provision of client account statements.

The SFC's investigation found that between 1 January 2021 and 7 March 2021, Guosen relied on expired standing authority of 1,009 clients to obtain financial accommodation by repledging their securities collateral with a bank as collateral.

The SFC also found that from May 2020 to November 2020, Guosen had provided monthly statements with incomplete and incorrect information to 930 clients.

Guosen's failures constitute breaches of the Securities and Futures (Client Securities) Rules (CSR), the Securities and Futures (Contract Notes, Statement of Account and Receipts) Rules (CNR) and the Code of Conduct.