Hong Kong SFC Imposes $3.8 Million Fine on China Everbright Securities for AML/CFT Violations

The Securities and Futures Commission (SFC) announced today that it has fined China Everbright Securities (HK) Limited (CESL) $3.8 million for failures in complying with anti-money laundering and counter-terrorist financing (AML/CFT) regulatory requirements.

The SFC said CESL failed to implement adequate and effective systems and controls to guard against and mitigate the risk of money laundering and terrorist financing associated with third party deposits between January 2015 and February 2017.

The SFC's investigation, which included a sample review of deposits received by CESL during the relevant period, revealed that CESL failed to identify 178 third party deposits amounting to over $250 million made through the sub-accounts maintained by CESL with a local bank.

In addition, CESL failed to detect suspicious fund deposits in some of the client accounts and make appropriate enquiries despite the presence of several red flags.

The SFC is of the view that CESL's conduct was in breach of the Anti-Money Laundering and Counter-Terrorist Financing Ordinance, the Guideline on Anti-Money Laundering and Counter-Terrorist Financing and the Code of Conduct.