Hong Kong SFC Fines Kylin International $1.1 Million for Failures in Managing Private Funds & Regulatory Obligations from 2018, 1) Failed to Disclose Conflicts of Interest of 6 Loans to 4 Sub-Funds, 2) Failed to Perform Monthly Reconciliations, Regular Valuations of Sub-Funds Assets & Appointing Independent Auditor to Audit Sub-Funds Financial Statements, 3) Have Adequate Systems & Controls for KYC & Suitability Assessment, 4) Maintain Records for Anti-Money Laundering & Counter-Terrorist Financing (AML/CTF), and 5) Incorrectly Informed Investors Exemption from Suitability Assessment Requirement for Reason of Being Classified as Professional Investor
10th February 2026 | Hong Kong
The Hong Kong Securities and Futures Commission (SFC) has fined Kylin International $1.1 million for failures in managing private funds & regulatory obligations from 2018 – 1) Failed to disclose conflicts of interest of 6 loans to 4 sub-funds, 2) Failed to perform monthly reconciliations, regular valuations of sub-funds assets & appointing independent auditor to audit sub-funds financial statements, 3) Have adequate systems & controls for KYC & suitability assessment, 4) Maintain records for anti-money laundering & counter-terrorist financing (AML/CTF), and 5) Incorrectly informed investors exemption from suitability assessment requirement for reason of being classified as professional investor. Hong Kong SFC (9/2/26): “The Securities and Futures Commission (SFC) has reprimanded and fined Kylin International (HK) Co., Limited (Kylin) $9 million for multiple failures in managing private funds over a period of three years (Notes 1 and 2). The SFC found that while acting as the investment manager or consultant for six sub-funds of a Cayman-incorporated fund between August 2018 and July 2021, Kylin failed to fulfil its regulatory obligations in five key areas. First, Kylin failed to manage and disclose conflicts of interest arising from six loans extended by it or its director to four of the sub-funds. Second, it did not perform monthly reconciliations or regular valuations of the sub-funds’ assets, nor did it appoint an independent auditor to audit the sub-funds’ financial statements. Third, it failed to implement adequate systems and controls for know your client and suitability assessment. Fourth, it neglected to maintain records demonstrating compliance with anti-money laundering and counter-terrorist financing (AML/CTF) regulations. Fifth, it misrepresented its regulatory obligations by incorrectly informing investors that it was exempt from the suitability assessment requirement as they were classified as professional investors. During the relevant period, Mr Steven Wong Yung was a responsible officer and the chief executive officer of Kylin, while Ms Zhu Hong was a director and manager-in-charge of various core functions of Kylin. The SFC considers that Kylin’s misconduct was attributable to Wong’s and Zhu’s failures to discharge their duties as members of Kylin’s senior management. Specifically, Wong was accountable for all of Kylin’s failures, whereas Zhu was responsible for the failures related to the loans and Kylin’s AML/CTF compliance (Note 3).” In 2025 August, the Hong Kong Securities and Futures Commission (SFC) issued a 12-month ban on Kylin International shareholder, Director & Manager-in-Charge Zhu Hong & $51,000 (HKD 400,000) fine for failure in duties, with Kylin managing private funds as investment manager. In 2025 March, the Hong Kong Securities and Futures Commission (SFC) issued a 14-month ban on ex-CEO of Kylin International Steven Wong Yung for failures in managing private funds as investment manager & managing risks on the business for Kylin.
“ Hong Kong SFC Fines Kylin International $1.1 Million for Failures in Managing Private Funds & Regulatory Obligations from 2018, 1) Failed to Disclose Conflicts of Interest of 6 Loans to 4 Sub-Funds, 2) Failed to Perform Monthly Reconciliations, Regular Valuations of Sub-Funds Assets & Appointing Independent Auditor to Audit Sub-Funds Financial Statements, 3) Have Adequate Systems & Controls for KYC & Suitability Assessment, 4) Maintain Records for Anti-Money Laundering & Counter-Terrorist Financing (AML/CTF), and 5) Incorrectly Informed Investors Exemption from Suitability Assessment Requirement for Reason of Being Classified as Professional Investor “
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In deciding the disciplinary sanctions against Kylin, the SFC has taken into account all relevant considerations, including the following:
- Kylin’s failures have the potential to undermine public confidence and damage market integrity;
- a strong deterrent message must be sent to the market that the SFC will not tolerate misconduct as shown in Kylin’s failures;
- Kylin implemented remedial measures subsequent to a limited review conducted by the SFC into Kylin’s business activities in late 2020;
- Kylin has ceased carrying on regulated activities and is no longer licensed; and
- Kylin has an otherwise clean disciplinary record.
Notes:
- Kylin was licensed under the Securities and Futures Ordinance to carry on Type 9 (asset management) regulated activity from 4 April 2014 to 22 January 2025. It ceased carrying on regulated activities on 31 December 2023. Following its application, the SFC revoked its licence on 22 January 2025.
- Asset managers are reminded to refer to the circular to licensed corporations engaged in asset management business issued by the SFC on 9 October 2024, which sets out deficiencies and substandard conduct noted in the management of private funds and discretionary accounts. As stated in paragraph 6 of the circular, the SFC will step up its disciplinary actions and impose harsher penalties against similar or persistent misconduct to send a strong deterrent message to preserve the integrity of our market and instil confidence in the investing public.
- Please refer to the SFC’s press release dated 19 March 2025 for information regarding the SFC’s disciplinary action against Wong, and its press release dated 18 August 2025 for information regarding its disciplinary action against Zhu.
A copy of the Statement of Disciplinary Action is available on the SFC website
Hong Kong SFC Issues 12-Month Ban on Kylin International Shareholder, Director & Manager-in-Charge Zhu Hong & $51,000 (HKD 400,000) Fine for Failure in Duties with Kylin Managing Private Funds as Investment Manager, 14-Month Ban Issued in 2025 March on ex-CEO of Kylin International Steven Wong Yung for Failures in Managing Private Funds as Investment Manager & Managing Risks on the Business for Kylin
19th August – The Hong Kong Securities and Futures Commission (SFC) has issued a 12-month ban on Kylin International shareholder, Director & Manager-in-Charge Zhu Hong & $51,000 (HKD 400,000) fine for failure in duties, with Kylin managing private funds as investment manager. In 2025 March, the Hong Kong Securities and Futures Commission (SFC) issued a 14-month ban on ex-CEO of Kylin International Steven Wong Yung for failures in managing private funds as investment manager & managing risks on the business for Kylin. Hong Kong SFC (18/8/25): “The Securities and Futures Commission (SFC) has banned Ms Zhu Hong, a substantial shareholder, director and former manager-in-charge of core functions (MIC) of Kylin International (HK) Co., Limited (Kylin), from engaging in any regulated activities for 12 months from 16 August 2025 to 15 August 2026 and fined her $400,000 for failures in managing various private funds (Notes 1 to 3). Between August 2018 and July 2021, Kylin was the investment manager and/or consultant of sub-funds of a Cayman-incorporated fund (Note 4). At the material time, Zhu was responsible for, among other things, approving borrowing agreements on behalf of the sub-funds and implementing internal control procedures to prevent money laundering and terrorist financing. The SFC’s investigation revealed that Zhu had failed to discharge her duties as Kylin’s director and MIC for AML/CTF in managing the funds in question. In deciding the sanction, the SFC took into account Zhu’s acceptance of liability, her remorsefulness, as well as her otherwise clean disciplinary record.”
Hong Kong SFC Issues 14-Month Ban on ex-CEO of Kylin International Steven Wong Yung for Failures in Managing Private Funds as Investment Manager & Managing Risks on the Business for Kylin
20th March 2025 – The Hong Kong Securities and Futures Commission (SFC) has issued a 14-month ban on ex-CEO of Kylin International Steven Wong Yung for failures in managing private funds as investment manager & managing risks on the business for Kylin. Hong Kong SFC (19/3/25): “The Securities and Futures Commission (SFC) has prohibited Mr Steven Wong Yung, a former responsible officer (RO) and chief executive officer of Kylin International (HK) Co., Limited (Kylin), from re-entering the industry for 14 months from 18 March 2025 to 17 May 2026 for failures in managing various private funds (Notes 1 to 3). Between August 2018 and July 2021, Kylin was the investment manager and/or consultant of sub-funds of a Cayman-incorporated fund (Note 4). Wong was responsible for overseeing the overall operations and internal controls of Kylin. The SFC found that Wong failed to discharge his duties as an RO and a member of the senior management of Kylin to ensure its maintenance of appropriate standards of conduct and adherence to proper procedures in managing the funds in question, and to properly manage the risks associated with Kylin’s business. In deciding the sanction, the SFC took into account Wong’s cooperation with the SFC in resolving the SFC’s concerns and his otherwise clean disciplinary record.”
Notes:
- Wong was accredited to Kylin and approved to act as its RO for Type 9 (asset management) regulated activity from 25 November 2016 to 30 November 2023. Wong is currently not licensed by the SFC.
- Wong was Kylin’s manager-in-charge of the (i) overall management oversight; (ii) key business line; (iii) anti-money laundering and counter-terrorist financing; (iv) compliance; (v) operational control and review; (vi) risk management; and (vii) information technology at different intervals.
- Kylin has ceased carrying on regulated activities since 31 December 2023. Following its application, the SFC revoked its licence on 22 January 2025.
- The SFC’s disciplinary action against Wong is related to its disciplinary actions against other related entities concerning the management of the funds in question. As the disciplinary actions against those entities are still in progress, the SFC will not disclose the details of its disciplinary action against Wong until the conclusion of its actions against those entities.
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