The Hong Kong Securities and Futures Commission (SFC) informed that it has reprimanded China Merchants Securities (HK) Co., Limited (China Merchants). The regulator has also fined the company $5 million for regulatory breaches and internal control failings related to mishandling of client money.
800 incidents happened between 1 October 2011 to 30 September 2014, where China Merchants transferred funds ranging from $68,000 to $308 million from client trust accounts for purposes other than those specifically allowed by the Securities and Futures Rules.
China Merchants also failed to employ fit and proper staff to conduct its business and have proper internal controls and procedures in place to ensure compliance with the Client Money Rules and safeguard client assets.