In a very curious case that, depending on the precise facts, may have major implications for the alternative asset management industry in Hong Kong, the SFC has announced that it is prosecuting a hedge fund manager for marketing a new fund.
For those not familiar with the market place in Hong Kong, there are two methods by which funds can be sold. Firstly you can seek registration of the fund for sale to the public. Secondly there are private placement rules that have been used for many years.
The SFC announcement is below. Many firms will be watching this case with some interest.
SFC commences criminal proceedings against SFC licensed corporation and its director
6 Sep 2012
The Securities and Futures Commission (SFC) has commenced criminal proceedings against Pacific Sun Advisors Limited (Pacific Sun), a SFC licensed corporation, and its director Mr Andrew Pieter Mantel in relation to four counts of issuing advertisements to promote a collective investment scheme (CIS) without the authorization of the SFC (Note 1).
The SFC alleges that between November and December 2011, the defendants issued an advertisement on the corporate website of Pacific Sun promoting a CIS called “Pacific Sun Greater China Equities Fund” without the authorization of the SFC.
The SFC also alleges that on or around 2 and 3 November 2011, the defendants issued an advertisement regarding the launch of the same CIS to the public by email without the authorization of the SFC.
The defendants appeared today before Acting Principal Magistrate Ms Bina Chainrai at the Eastern Magistracy and pleaded not guilty. The case was adjourned to 1 November 2012 for a pre-trial hearing.
- Pacific Sun is licensed by the SFC to carry out Type 4 (advising on securities) and Type 9 (asset management) regulated activities. Mantel, who is licensed by the SFC to carry out Type 4 (advising on securities) and Type 9 (asset management) regulated activities accredited to Pacific Sun, is a responsible officer of Pacific Sun.