Hong Kong SFC 2021 Q2 Report: Actions on Market Misconduct, $640,000 Fines, 47527 Licensees, ESG Guidelines for Asset Managers
19th August 2021 | Hong Kong
The Hong Kong Securities and Futures Commission (SFC) has released the Q2 Report, summarising key developments of the financial industry from April to June 2021, including increased actions on market misconduct including ramp & dump market manipulation schemes and fraud, $640,000 (HKD 5 million) of fines on 4 corporations and 3 individuals, a total of 47,527 licensees including 3,174 licensed corporations in Hong Kong and ESG disclosure guidelines for Asset Managers. ESG (Environmental, Social & Governance) View: Hong Kong SFC 2021 Q2 Report
“ Actions on Market Misconduct, $640,000 Fines, 47527 Licensees, ESG Guidelines for Asset Managers “
SFC 2021 Q2 Report Key Statistics:
SFC 2021 Q2 Report Key Statistics:
- Licensees and registrants totalled 47,527, including 3,174 licensed corporations
- Vetted 120 new listing applications
- Authorised 39 unit trusts and mutual funds
- First 2 ETFs cross-listed on Hong Kong (SEHK) and Shanghai Stock Exchange in June 2021
- $640,000 (HKD 5 million) of fines on 4 corporations and 3 individuals
- SFC made 2,319 requests for trading and account records triggered by untoward price and turnover movements.
- 71 in-depth inspections of licensed corporations to review compliance with regulatory requirements.
- Issued 179 directions to gather additional information in 28 cases and wrote to detail its concerns in one case as part of its review of corporate disclosures.
1) ESG Disclosure Guidelines for Asset Managers, Transit to Carbon Neutrality
The SFC provided asset managers with further guidance on disclosures for environmental, social and governance funds, especially those with a climate-related focus, to help investors better understand these products and combat greenwashing.
In July 2021, Hong Kong’s Green and Sustainable Finance Cross-Agency Steering Group, co-chaired by the SFC and the Hong Kong Monetary Authority, announced the next steps in its collaborative strategy to transition the financial ecosystem towards carbon neutrality.
2) Subsidise Setup of Open-Ended Funds & REITs in Hong Kong
To encourage a broader range of investment vehicles, it began accepting applications for the Government’s grant scheme to subsidise the setting up of open-ended fund companies and real estate investment trusts (REITs) in Hong Kong.
3) Upgrade Standards in Financial Industry
The SFC concluded a consultation on proposals to upgrade standards in the industry by updating the competency framework for intermediaries and individual practitioners.
4) Market Misconduct, IPOs, Ramp & Dump Scheme
The SFC also stepped up its joint efforts with the Stock Exchange of Hong Kong Limited (SEHK) to combat misconduct and improper behaviour in new listings. Problematic applications with red flags indicating a lack of genuine investor interest are now subject to heightened scrutiny, and the regulators will object to or reject an application if necessary.
The SFC also stepped up its joint efforts with the Stock Exchange of Hong Kong Limited (SEHK) to combat misconduct and improper behaviour in new listings. Problematic applications with red flags indicating a lack of genuine investor interest are now subject to heightened scrutiny, and the regulators will object to or reject an application if necessary.
In a joint operation against a syndicate suspected of operating ramp and dump market manipulation schemes and committing fraud, the SFC and the Police searched a Hong Kong listed company’s office premises and its senior executives’ residences. The Police arrested four persons, including three of the company’s senior executives. The SFC also extended its campaign to raise awareness of social media investment scams organising community outreach events with the Police and reminding licensees to notify the SFC when they detect suspected ramp and dump schemes
5) Regulation of & Warning of Virtual Assets
The Government published consultation conclusions in May on a legislative proposal for the SFC to regulate centralised virtual asset exchanges. In a July 2021 statement, the SFC warned investors of the risks of trading virtual assets on an unregulated platform.
Related:
- Hong Kong SFC & ICAC Arrests Former Senior Executive of Listed Company for Suspicious Loan Activities
- Hong Kong SFC to Require Investor Identification for Securities Trading in 2022, Reporting of OTC Transactions in 2023
- Hong Kong SFC Fines UBS $1.49 Million for Failure to Disclose Conflict of Interests, Risks and to Qualify Clients
- Hong Kong SFC 2020 Report: Asset and Wealth Management in Hong Kong
- Hong Kong SFC and Corruption Agency ICAC Crackdown on Stock Manipulation, Arrest Listco & Search IPO Underwriter
- Hong Kong SFC: Police Arrested 12 People Suspected of Ramp & Dump Manipulation Schemes
- Hong Kong SFC Issues Restriction Notices to 13 Brokers for 54 Accounts Related to Social Media Scam
- Hong Kong & Singapore Regulators Warn Investors of Increased Trading Risks Triggered by Social Media & Online Forums
- Hong Kong SFC Warns of Investment Scams on Social Media Platforms
- Singapore Exchange Issues Alert on Stocks Trading Scam in Chat Groups
Fines:
- Nomura, UBS and Unicredit Fined $451 Million for Rigging European Bond Prices
- United States SEC Gives Record $114 million to a Single Whistleblower
- Ant Group $300 Billion Record IPO Suspended in both Shanghai and Hong Kong Exchange
- United States SEC Fines Under Armour $9 Million for Misleading Investors on Revenue Growth in 2015
- Alibaba Fined $2.78 Billion by China State Regulator for Anti-Monopoly Practices
More:
- Swiss Private Bank Julius Baer to Pay $79.7 Million Fine for Laundering $36 Million of FIFA Football Bribes
- Julius Baer Reaches $79.7 Million Settlement for Role in FIFA Corruption Events
- Malaysia Sues JP Morgan, Deutsche and Coutts for $2.93 Billion, Receives $452 Million from United States
- Credit Suisse, UBS, Nomura, MUFJ and Morgan Stanley Losses for Archegos Family Office Nears $10 Billion
- Malaysia AmBank Group to Pay $700 Million for all 1MDB Claims to Malaysia Government
- Goldman Sachs to Pay $3.9 Billion to Malaysia to Resolve 1MDB Criminal and Regulatory Proceedings
About Securities and Futures Commission (HK)
The Securities and Futures Commission (SFC) is an independent statutory body set up in 1989 to regulate Hong Kong’s securities and futures markets.
We derive our investigative, remedial and disciplinary powers from the Securities and Futures Ordinance (SFO) and subsidiary legislation. Operationally independent of the Government of the Hong Kong Special Administrative Region, we are funded mainly by transaction levies and licensing fees.
Visit: Hong Kong Securities and Futures Commission
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