SFC imposes a fine of $2.1 million on Credit Suisse Securities (Hong Kong) Limited over breaches of electronic trading requirements

The Securities and Futures Commission (SFC) has imposed a fine of $2.1 million on Credit Suisse Securities (Hong Kong) Limited (CSSHK) for breaches related to failures in regulating its electronic trading systems.

According to the SFC, between 09:39 and 09:47 on 28 February 2019, CSSHK submitted 16,935 erroneous market making quotes to the market. This operation resulted in the execution of 8,042 stock options trades at prices that deviated from the then prevailing market prices. As a stock options amarket maker, CSSHK used the symbol mapping program in making quotes. However, there was a logic error in this programme.

The SFC believes that CSSHK's internal controls and regular tests in place at the time failed to prevent or promptly detect the incident, and these failures constitute breaches of electronic trading requirements.

Based on relevant considerations 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 SFC decided the final sanction.