Hong Kong SFC Slaps Swiss-Asia Asset Management (HK) Limited with $3 Million Fine

The Securities and Futures Commission (SFC) has reprimanded and fined Swiss-Asia Asset Management (HK) Limited (Swiss-Asia) $3 million for internal control failings and regulatory breaches in relation to the monitoring of trading activities in discretionary accounts and record keeping.

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The disciplinary action follows an SFC investigation into the internal controls of Swiss-Asia after a client's complaint.  The complaint centred on option trading by a former licensed representative of Swiss-Asia in the client's discretionary account.  

The client claimed that some of the trades were much riskier than agreed and fell outside the scope of her asset management mandate agreement with Swiss-Asia between April 2015 and August 2016.

The SFC's investigation found deficiencies in internal controls of Swiss-Asia, in that it failed to:

• ​properly monitor the trading activities in the client's discretionary account for around 15 months;

• ​have procedures in place to ensure proper supervision of the operation of discretionary accounts; and

• ​maintain proper records of its compliance checks on discretionary accounts.