The Hong Kong Securities and Futures Commission (SFC) announced that it has reprimanded and fined UBS Securities Asia Limited (UBS Securities) $4.5 million for failing to put in place effective controls to record transactions and client consents in relation to its facilitation trading activities.
In the course of an SFC inspection in 2016 and a subsequent investigation, UBS Securities failed to provide the SFC with complete information on its client facilitation trades. In particular, UBS Securities was only able to locate client consent records for about half of the client facilitation trades it conducted between June 2015 and June 2016.
As a licensed corporation, UBS Securities is under a regulatory duty to have the resources and procedures which are needed for the proper performance of its business activities and implement them effectively. It is also expected to maintain and keep sufficient records to explain its client facilitation business.
In resolving the concerns with UBS Securities, the SFC took into account all the circumstances, including:
- the initiative of UBS Securities to bring this matter to a conclusion by cooperating fully with the SFC to resolve the regulatory concerns pertaining to the disciplinary action;
- the engagement of a reviewer to review the completeness and accuracy of the information provided by UBS Securities to the SFC;
- the introduction of an on-going supervisory review to ensure the adequacy of client consents; and
- the undertaking by the board of directors of UBS Securities of implementing effective controls to ensure that adequate records for facilitation trading are maintained and kept.