A Review of Asian Regulators

Starting off the new year, we may as well do a recap of last year’s events. To summarize the equities market saw glimmers of hope at last year’s dawn but the mood later relegated. The US stock market saw itself flash crashed in the second quarter and Eurozone has been stranded in quicksand. Fund houses and banks alike have started to find themselves confronted with more urgent regulatory demands.

The FT published an interesting viewpoint recently concluding that Asia may be pioneering financial regulatory developments and can set example for its European counterpart. In fact some of the industry professionals quoted go as far to observe that elements of Basel III might have drawn inspirations from Asian precedents.

It did point out that there were still some problems with the framework of regulation in Asia and Asia’s regulators are less coordinated and have limited reach beyond their borders to chase the non-compliant. 

In our view, the FT quote that acquiring a license in Hong Kong may take upwards of 12 months was off the mark and the processing time is much shorter than that.  Likewise the Hong Kong versus Singapore story is old news and the new rules for licensing of fund management companies widely expected to be introduced in Singapore in the first half of this year will level the playing field between the 2 cities even further.

The Financial Times article can be accessed here.

Round-up of Synthetic ETF Development, so-far

There has been more clamour recently about tightening synthetic ETFs rules worldwide and the topic has been wrestled over by regulators and the regulated. Bloomberg Businessweek reported on Aug 26 on how iShares, a Blackrock’s subsidiary, has been seeking to apply for an exclusive license with the SEC, in order to allow their use of internal indexes as points of reference in possible future synthetic ETF products. Regulators have become more vigilant than ever in limiting counterparty risks in case of their counterparty defaults. Our blog entry earlier mentioned how SFC in Hong Kong had raised collateral limits to 120%; Bank of England was expressing unease about synthetic ETFs as a product class; and SEC intends to solicit public comments on a recent consultation paper on use of derivatives, aiming to enhance disclosures by ETFs in their composition.  

As experienced investors are aware, synthetic ETFs help cuts creation costs through the use of swaps. The use of derivatives in place of physical underlyings makes creation much cheaper but this also gives rise to potential counterparty risks. Collateral used in swaps does not always mimic the actual index referenced by the ETF and deviations in performance occur.

Blackrock’s application for tracking an internal iShare index at this time may be more difficult when regulators are looking for ETFs to replicate independent indexes but it will be interesting to see if Blackrock’s proposed control to firewall the tracking process may ease worries about opacity. The suggestion may help distinguish its product offerings.

For those interested in the variation of and views on synthetic ETFs, the working paper 343 from Bank of International Settlements offers some good reviews. The link is attached here.

An article from Interactive Investor can be found here.

A report on iShares SEC Licensing can be found here.

Report World round-up can be found here.

Resource review: Regulatory Handbook Volume 2 – Business Standard

What is it?

Volume 2 of the Hong Kong Securities and Futures Commission’s (SFC) Regulatory Handbook is the Business Standard for all companies licensed by, or seeking to be licensed by, the SFC.  It is the SFC’s attempt to collate all their current circulars, guidelines and codes of conduct into a document that is navigable by subject.

Why would I use it?

Finding circulars on a specific topic can be frustrating.  New circulars are generally published to a list on the SFC website where they are sorted by date.  This method of circulation is helpful for new updates, but poses a difficulty for finding all the rules that currently apply to a specific topic.  For example, finding all applicable circulars on Anti-Money Laundering (AML) requires searching through a large list of irrelevant information.

The Business Standard groups the SFC’s regulatory publications by broad subject areas.  If one were searching for AML circulars, one would find all of the SFC’s publications that are currently in force on the topic of AML grouped together under the heading of “Money Laundering” for easy reference.

Where can I find it?

The Business Standard can be found on the SFC’s website at the following URL: http://www.sfc.hk/sfcRegulatoryHandbook/EN/sfcRegulatoryHandbookServlet

Alternatively, you can locate it from the SFC’s homepage (www.sfc.hk) by hovering your mouse pointer over the heading Legislation & Regulatory Handbook, then clicking on the link to Regulatory Handbook that appears.

Next, click on Volume 2 – Business Standard as it appears at the left-hand side lower down on the screen.

How do I use it?

The Business Standard uses a drill down approach to finding information.  The contents of the document are listed in a hierarchy under seven broad headings:

• Part A - Licensing of Intermediaries and Continuing Obligations of Licensed Persons
• Part B - Specific Requirements for Regulated Activities
• Part C - Regulated Investment Products
• Part D - Corporate Finance
• Part E - Enforcement Related
• Part F - Securities and Futures Ordinance
• Part G - Miscellaneous

There are many entries listed under each heading.  Entries are often found within subcategories.  Taking the seven headings as the broadest level, the hierarchy has five levels at its narrowest.  An example would be:

• Part C - Regulated Investment Products
  • Collective Investment Schemes
    • Codes
      • SFC Handbook for Unit Trusts and Mutual Funds, Investment-Linked Assurance Schemes and Unlisted Structured Investment Products (full version) (effective from 25 June 2010)
        • Section I – Overarching Principles Section

Using this system it is possible to find information on quite specific topics if one starts from the right level.

Alternatively, one can use the find function in one’s browser to search for keywords on the page if the drill down method is not successful.

What is good

• Clustering by subject.  If I want to know about licensing requirements for the Type 9 regulated activity, asset management, I can read all of information in Part A, and then the section of Part B on asset management.
• Authority.  These regulations are published directly by the SFC.
• Cost.  It is a very informative and useful resource that is provided by the SFC without any charge.
• Completeness/currency.  Although the SFC has put a disclaimer on the website to say that the standard may not be complete at a given time, the document is a fair representation of what SFC regulations are presently in force.
• Exclusive categories.  Each circular, code and guideline has its own place in the hierarchy that the SFC has created.  This feature reassures the reader that they have found the right information in the right category.

What could be better

• Inconsistent categorization.  Some categories are listed at the same level as circulars listed in the parent category.   The system could avoid this difficulty by providing a “General” category at the beginning of each section. A more consistent distinction between categories and actual documents would provide a more detailed list and easier navigation at the beginning of the document.
• Search references.  When searching the SFC website, it would be really helpful to have a related subject show up in the results based on the classification system used to organize the Business Standard.
• Unclear taxonomy.  Some categories are subdivided by subject, while the section on Collective Investment Schemes is subdivided by document type.
• Broad categories are too broad. The decision to keep licensing and ongoing obligations in the same category has made Part A really long.  This choice does not make it easier for finding information on ongoing obligations since one must scroll through the licensing section first.
• Cross-references.  Hierarchical systems require categories to be exclusive, but that does not mean that certain subjects are not related.  For example, finding information on suitability obligations requires looking in several different categories.  A cross-referencing system from one document to others on a related subject would be useful.
• Miscellaneous category.   Sixty is too high of a number to file under miscellaneous.  These documents should be filed elsewhere, possibly in new categories.

Summary

The SFC’s Business Standard is a useful tool and should be one of the first places to turn when looking for information on a specific topic related to SFC regulations.  Despite its shortcomings, it is one of the best free resources for finding information about the licensing process and related obligations for financial companies in Hong Kong.

SFC releases consultation paper on Takeovers and Mergers

On Aug 24, 2011, the SFC in Hong Kong announced the release of a consultation paper on the Codes of Takeovers and Mergers and Share Repurchases, aiming to relax and streamline takeover procedures. This may be of interest to foreign institutional investors who are looking to expand operations through acquisition of other existing organizations. The property element stressed in this code may be quite exotic to foreign entrants, but they often constitute a good chunk of local companies’ assets.

The consultation paper proposes changes in three areas. The first element is to require only offeror companies, which have significant property interests and are related-parties to vendor companies, to perform property valuation, whereas in the past the requirement is more of a blanket one. The second element aims to shift responsibility for verifying independence between vendor and offeror solely to the placing agent, freeing the executive from the vendor side in shouldering the responsibility. Thirdly the payment of shares acquired by the offeror is proposed to be shortened from 10 to 7 business days.

The proposal is particularly intriguing as it seems to offer a bit of breathing space for those prospective acquirers whose eyes are set on property, especially in the context of the region’s bubbling real estate market.    

The consultation period ends Sept 26 and the industry can make their input on the three points. The paper can be found here.

Here is the SFC announcement.

SFC proposes takeovers-related rule amendments

The Securities and Futures Commission (SFC) has today begun a one-month consultation to solicit public comments on proposed amendments to the Codes on Takeovers and Mergers and Share Repurchases.

Formulated in consultation with the Takeovers Panel, the proposals aim at amending the areas as follows:

• Property valuation: Amend the property valuation requirement so that it will only be applicable to related-party transactions or offers which involve special deals that require shareholder approval. The proposed amendments recognise that in some circumstances, the continued full application of the valuation requirement may be unduly burdensome both in cost and time, especially in cases when the need for the valuation arises from the action of an unrelated party.

• Confirmations of independence of placees: Clarify that it is the responsibility of financial advisers, placing agents and acquirers of the voting rights to confirm the independence of placees.

• Timing of payment for acceptances: Change from 10 days to seven business days the prescribed period for payment of acceptances in response to a request by the Federation of Share Registrars Limited to allow share registrars and receiving agents a more manageable timeframe to process payments without compromising the interests of accepting shareholders.

"We believe that the proposals could facilitate market operations and result in the disclosure of more focused and relevant information,” said Mrs Alexa Lam, the SFC’s Acting Chief Executive Officer. “We also believe it is important to clarify the responsibilities of market practitioners."

Interested parties are invited to submit their comments to the SFC by 26 September 2011. Comments may be submitted online via the SFC website (www.sfc.hk), by e-mail to cfdconsult@sfc.hk, by post or by fax to 2810 5385.

HK SFC takes action against RO for control failures

Showing once again the vicarious nature of liability for Responsible Officers in Hong Kong when supervising their businesses, the SFC has reported on two fines levied against a local broker and one of the Responsible Officers.  The SFC report from their website is as follows:

SFC reprimands and fines Taifair Securities Limited and Kwok Fai

The Securities and Futures Commission (SFC) has issued a reprimand to Taifair Securities Limited (Taifair) and its responsible officer, Mr Kwok Fai. The SFC has also fined them $400,000 and $100,000 respectively (Note 1).

The decision follows an SFC investigation which found that Taifair’s settlement supervisor, who was not licensed with the SFC, had misappropriated clients’ assets (Note 2).

The SFC investigation revealed that Taifair had a number of internal control deficiencies, including:

• insufficient management supervision over daily operations – the settlement supervisor who misappropriated clients’ assets was largely unsupervised, and management did not review a number of important reports concerning Taifair’s daily operations;
• there was no compliance function set up at Taifair;
• there was no comprehensive manual that governed Taifair’s daily operational policies and procedures; and
• weak data protection measures – access control to Taifair’s computer brokerage system (the POP system) was weak, trading data in the POP system was susceptible to manipulation and the audit logs in the POP system could be turned off such that manual modifications of data could be made without any audit trail.

Kwok was a responsible officer of Taifair and oversaw the compliance function at Taifair. In such capacity, Kwok was responsible, but failed to ensure that effective compliance procedures were in place and properly implemented. As such, Kwok should bear responsibility for Taifair’s failure in that regard.

In deciding the sanction, the SFC took into account all the circumstances including:

• Taifair’s failures in primary internal controls are serious;
• Kwok has seriously undervalued the importance of Taifair’s compliance function and internal controls;
• The affected clients did not suffer any loss because Taifair has reimbursed all affected clients and reported the matter to the SFC shortly after the discovery of the misappropriation;
• Taifair and Kwok are remorseful, and Taifair has remediated its internal control failures by adopting the recommendations of an independent accounting firm which conducted a review of its internal controls;
• Taifair and Kwok have co-operated with the SFC; and
• Taifair and Kwok have no previous disciplinary record.

The whereabouts of the settlement supervisor remains unknown. The matter has also been reported to the Police by Taifair.

End

Notes:

1. Taifair is licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) regulated activity. Kwok is licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) and Type 2 (dealing in futures contracts) regulated activities and is accredited to Taifair and Taifair Futures Limited. Kwok remains a responsible officer of Taifair.
2. As a result of the same investigation, the SFC has already taken disciplinary action against Mr Peter Tam Man Chuen, an account executive of Taifair. Please see SFC’s press release dated 2 July 2010 for details of the disciplinary action taken by the SFC against Tam, suspending his licence for 18 months.

SFC to appeal Tiger Asia matter

On 21 June 2011, the SFC announced that it would appeal a decision made in the Court of First Instance in the Tiger Asia matter. The SFC alleges the Tiger Asia and related parties contravened Hong Kong’s laws prohibiting insider dealing and market manipulation. In the ruling, the Court of First Instance determined that it did not have jurisdiction to make such a ruling and only only a court exercising criminal jurisdiction or the Market Misconduct Tribunal (MMT) had jurisdiction.

The SFC’s view is that the Tiger Asia parties are not within the jurisdiction of Hong Kong’s criminal courts and they should not be entitled to receive immunity from prosecution which would be the result if proceedings were commenced before the MMT.

The will definitely be more to follow on this case.

Further details are available here.

SFC and HKMA welcome Lehman progress

On 14 June 2011 the SFC and HKMA reported that they are pleased by PwC’s announcements concerning the distribution of the underlying collateral for the Minibond series 10 to 12, 15 to 23 and 25 to 36 (the Relevant Series) to the nominal holders of the Relevant Series via the Clearing Systems in accordance with the terms of the settlement agreement with Lehman Brothers.

The SFC and the HKMA are also pleased to note that the recovery percentages on a weighted basis are on average 1.6% higher than the indicative recovery percentages stated in the announcement by the Receivers dated 28 March 2011. The recovery of collateral at a higher level, together with the additional ex-gratia payment by the 16 Lehman Brothers' Minibond distributing banks, will increase the level of recovery of eligible customers to between 85% and 96.5% of their initial investment.

Further details and regulator comments are available here.

SFC regulation and supervision of intermediaries

On 2 June 2011, the SFC released two papers that detail the existing regulatory and supervisory framework for intermediaries.

The first paper, “Regulatory Framework for Intermediaries” outlines the broad role and approach taken by the SFC in regulating intermediaries. The second paper, “Approach to Supervision of Intermediaries” includes details of the SFC supervision processes.

By releasing these papers the SFC hopes that there will be a better understanding of what is expected of the intermediaries, and provide an insight into how things work at the SFC.

Short reporting for Hong Kong

Whether Hong Kong needs it or not, and we would suggest it does not need it, short position reporting is coming to Hong Kong.  The following was on the SFC website today:

SFC to adopt new short-position reporting regime

In a set of consultation conclusions released today, the Securities and Futures Commission (SFC) announced that after taking into account industry feedback and the domestic market situation, it will introduce a short-position reporting regime to enhance transparency of short-selling activities in Hong Kong.

The SFC received 21 responses from market participants to its 31 July 2009 consultation paper on increasing short-selling transparency which discussed two possible approaches: enhancing the existing transactional reporting regime and implementing a new short-position reporting model.

“A build-up of large short positions may be potentially disruptive to market stability,” said the SFC’s Chief Executive Officer Mr Martin Wheatley. “A short-position reporting regime will not only complement Hong Kong’s robust short-selling regulatory framework but will also provide a more complete picture of short-selling activities in our market.”

Under the proposed regime, the reporting obligation will be triggered if a short position is equal to or exceeds, 0.02% of the issued share capital of a listed company, or a market value of $30 million, whichever is lower. Weekly reports must be submitted to the SFC until the short position falls below both trigger levels. The SFC will publish aggregated short positions of each stock on an anonymous basis a week later.

The proposed short-position reporting regime will only be applicable to constituent stocks of the Hang Seng Index, the H-shares Index, financial stocks and other stocks specified by the SFC. Derivatives will not be included.

The new reporting model will be implemented by a new subsidiary legislation, on which the SFC will be consulting the public in due course.

The consultation paper conclusions reached by the SFC are sad in that they really did not address the issue of the cost of the information that is going to be provided and whether that cost will be of any benefit to Hong Kong.  If the rules were in place tomorrow a short position of more than HK16m (just over US2m) in Esprit Holdings (essentially a fashion brand) would need to be reported each week to the HK SFC.  The SFC would aggregate the reports and publish them after on an aggregated basis.

The world will clearly be a much safer place with well known fashion brands safe from nasty short sellers and industry participants will pay a tax on their operations to report positions and keep our world peachy.

It must be remembered that Hong Kong already has a strong and functioning short selling process and short selling was not an issue that effected Hong Kong in any adverse way during the financial crisis.

This is not the SFC's finest hour and we hope that future changes are given a bit more thought than this one.

Legislation will be needed and it will take time for that to be drafted and passed.

Another sanction in HK for market manipulation

The Hong Kong SFC website reported as follows:

SFC bans Edmond Chau Chin Hung for life

The Securities and Futures Commission (SFC) has publicly reprimanded Mr Edmond Chau Chin Hung, fined him $2 million and prohibited him for life from re-entering the industry for engaging in market misconduct (Note 1).

The disciplinary action follows the Market Misconduct Tribunal’s (MMT) determination that Chau, a former responsible officer of Sun Hung Kai Investment Services Ltd (SHKIS), and three other parties had engaged in market misconduct by false trading and price rigging in the shares of QPL International Holdings Ltd (QPL). The MMT made certain orders against Chau, including recommending that the SFC take disciplinary action against him (Note 2).

During the period from 6 May to 10 June 2003, Chau engaged in scaffolding activities by placing numerous buy orders for QPL shares and subsequently cancelling, reducing these orders or allowing them to lapse in order that two SHKIS clients could sell their holdings of QPL shares more actively and quickly.

Not only was Chau in breach of SHKIS’s internal policies, he also abused his senior position as responsible officer by procuring the assistance of or conniving with his subordinate to conduct these unlawful activities.

When he attended interviews with the SFC during the investigation, he denied having conducted any scaffolding activities or engaged in any market misconduct. However, during the MMT proceedings, he admitted that he had done so.

In deciding upon the sanctions against Chau, the SFC took into account that Chau:

• played a primary role in perpetrating the market misconduct for five weeks and his misconduct was only put to an end by the intervention of the SFC with its inquiry into the trading of QPL shares;
• abused his senior position at SHKIS by procuring the assistance of his subordinate to conduct unlawful activities;
• co-operated with the SFC by consenting to the disciplinary action; and
• has a clear disciplinary record with the SFC.

End

Notes:

1. Chau was licensed under the Securities and Futures Ordinance to carry on business in Type 1 (dealing in securities), Type 2 (dealing in futures contracts) and Type 3 (leveraged foreign exchange trading) regulated activities. He was a responsible officer of Bali Securities Co Ltd, SHKIS, Sun Hung Kai Commodities Ltd, and Sun Hung Kai International Commodities Ltd. He ceased to be a licensed person and the approval for him to act as a responsible officer was revoked on 27 February 2009.
2. The MMT’s press release and report (http://www.info.gov.hk/gia/general/200903/18/P200903180162.htm) can be found on the MMT’s website (www.mmt.gov.hk).

Mr Allen Lam Kar Fai banned for life by SFC

On 23^rd November 2009 The Securities and Futures Commission (SFC) reported that it had banned Mr Allen Lam Kar Fai from re-entering the industry for life. This follows the revoking of his licence in 2006.  (Note 1).

The disciplinary action follows Mr Lam’s conviction for insider dealing in July 2009 at the District Court (Note 2). He was sentenced to six months’ imprisonment and ordered to pay a fine of HK$69,000.

Mr Lam was investigated after he gave confidential and price sensitive information to a fund manager before it was public. The fund manager, Ryan Fong,  then took advantage of the information. Mr Fong has been sentenced to 1 year imprisonment and order to pay a fine of nearly HK$1.4 million. There has been no comment on any action taken by SFC to penalise or ban Mr Fong.

Mr Mark Steward, the SFC’s Executive Director of Enforcement  said “The SFC expects licensees will safeguard confidential, price sensitive information, not exploit it. Lam’s conduct violated the trust expected of him as a licensee. There is no place for licensees who misuse confidential information and enter into arrangements like this to deceive the market,”

Notes:

1. Lam was licensed under the Securities and Futures Ordinance to carry on Type 6 (advising on corporate finance) regulated activity and had been accredited to CLSA Equity Capital Markets Ltd (CLSA) since 2001. His licence was revoked in June 2006 and he does not currently hold an SFC licence.
2. Please see SFC press releases dated 7 July 2009 and 20 July 2009.

For the full details please use the following Mr Allen Lam Kar Fai

Hong Kong SFC fines Sun Hung Kai Investment Services for compliance failure

According to the SFC website the Securities and Futures Commission (SFC) has publicly reprimanded Sun Hung Kai Investment Services Ltd (SHKIS) and fined it $4,000,000 for internal control failures that contributed to market misconduct (Note 1).  The offences relate to a failure to enforce controls relating to the separation of agency and proprietary trading.

The amount of the fine, HK$4 million (or USD514,000), is high for this type of offence and reflects the overall trend of increasing fines against corporates in Hong Kong where the SFC determines that a breach has occurred.

The SFC website reports as follows:

Following an inquiry into dealing in the shares of QPL International Holdings Ltd in 2003, the Market Misconduct Tribunal (MMT) found on 22 January 2009 that Mr Edmond Chau Chin Hung (a former responsible officer of SHKIS) and Ms Connie Cheung Sau Lin (a former account executive of SHKIS) engaged in false trading and price rigging, contrary to the Securities and Futures Ordinance, for the period from 6 May to 10 June 2003.

The MMT further found that:

• the misconduct of Chau was attributable to SHKIS of whom he was an executive director and responsible officer, and to Cheeroll Ltd (now renamed Sun Hung Kai Strategic Capital Ltd) for whom Chau was authorised to trade; and
• SHKIS was vicariously liable for the misconduct of Cheung.

On 25 February 2009, the MMT made certain orders including recommending that disciplinary action be taken by the SFC against SHKIS, Chau and Cheung (Note 2).

The SFC found that there were internal control failures at SHKIS that contributed to the market misconduct because:

• despite policies to segregate proprietary trading and client trading, SHKIS gave Chau the authority to conduct both types of trading which gave him the opportunity to misuse information gathered on the client trading side of the business to engage in unlawful activities in a proprietary account;
• at material times, SHKIS allowed Chau and Cheung to place orders in the same dealing room by open “outcry”, which was inconsistent with SHKIS’ formal policy to physically separate proprietary and client trading functions; and
• SHKIS did not detect Chau and Cheung’s misconduct for five weeks until brought to its attention by the SFC.

In deciding on this outcome, the SFC took into account that:

• Chau and Cheung acted without SHKIS’ sanction and in breach of its internal policies;
• SHKIS did not profit from Chau and Cheung’s actions;
• SHKIS co-operated with the SFC by entering into a settlement resolution; and
• SHKIS has made improvements to its framework of controls and reporting in the period since.

Mr Mark Steward, the SFC’s Executive Director of Enforcement, said: “Sun Hung Kai Investment Services Ltd had in place appropriate policies segregating client and proprietary trading which, in this case, were not properly implemented or policed. Policies designed to prevent market misconduct must be actively monitored and supervised by senior management and the SFC will hold firms to account for their failure to ensure their compliance systems are working properly.”

End

Notes:

1. SHKIS is licensed under the Securities and Futures Ordinance to carry on business in Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities.
2. The MMT’s press release and report can be found on the MMT’s website www.mmt.gov.hk

(see http://www.info.gov.hk/gia/general/200903/18/P200903180162.htm)

Progress of the HKMA's investigations in Lehman-Brothers-related cases

The biggest issue in financial services in Hong Kong over the last 12 months has been the collapse of Lehman Brothers and the knock on effect it had in relation to various structured notes purchased by members of the public in Hong Kong. After street demonstrations, formal inquiries and various investigations a process of settling the claims of disgruntled investors and referring specific cases of alleged misselling to regulators is well underway. The following press release from the HKMA (who regulate banks in Hong Kong) was released on 21 August:

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SFC seeks court orders to freeze assets of Tiger Asia Management LLC

In an unusually strong action (for Hong Kong) the Hong Kong SFC announced on 20 August that they had "commenced proceedings in the [Hong Kong] High Court against Tiger Asia Management LLC, a New York-based asset management company, and three of its senior officers, Mr Bill Sung Kook Hwang, Mr Raymond Park and Mr William Tomita (Notes 1 and 2). The SFC has applied for an injunction order to freeze assets of Tiger Asia and the three senior officers, including those located overseas, up to $29.9 million pending final orders that the SFC is seeking. The amount is equivalent to the notional profit made by Tiger Asia in alleged insider dealing and market manipulation activities.

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SFC prosecution relating to offshore / onshore activities

On June 2, the SFC published a release stating that it had disciplined a trio for unlicensed leveraged forex trading. The SFC website stated: The Securities and Futures Commission (SFC) has taken disciplinary actions against three individuals of Hantec Group for their involvement in an unlicensed leveraged foreign exchange trading operation following a determination of the Securities and Futures Appeals Tribunal (SFAT) (Note 1). The SFC has: revoked the licence of Ms Ng Chiu Mui and prohibited her from re-entering the industry for 10 years; suspended the licence of Mr Law Kai Yee for two years and three months (Note 3); and prohibited Ms Tang Yuen Ting from re-entering the industry for nine months and fined her $1,455,496

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