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Hong Kong regulator fines Potomac Capital Limited $800,000 for Financial Resources Rules violation



The Hong Kong Securities and Futures Commission (SFC) announced the reprimand and fine of financial services firm Potomac Capital Limited. The SFC imposed a $800,000 on the company for failures to comply with the Securities and Futures (Financial Resources) Rules (FFR).

The Hong Kong watchdog discovered that Potomac overstated its liquid capital in its financial returns from November 2016 to May 2017 by incorrectly including certain fees receivables from two clients accumulated since around April 2013 as liquid assets when the aged fee receivables should not qualify as liquid assets under the FRR.

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The exclusion of the aged fee receivables would have resulted in monthly liquid capital deficits ranging from $335,000 to $449,000 for Potomac from February to May 2017.

The SFC found that Potomac had incorrectly included the fees receivables in its liquid capital for more than three years. However, the company has rectified the FRR breach.


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Hong Kong regulator fines Potomac Capital Limited $800,000 for Financial Resources Rules violation

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