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Hong Kong’s Securities and Futures Commission (SFC) today announces that it has reprimanded and imposed a fine of HK$4 million (US$ 514,330) on Yuanta Securities (Hong Kong) Company Limited, a wholly owned subsidiary of Yuanta Financial Holdings Co Ltd (TPE:2885).
The regulatory decision stems from findings that Yuanta Securities has failed to disclose the actual execution price and properly and adequately disclose the financial gains it made whilst handling bond transactions for its clients.
An SFC investigation found that from July to December 2012, Yuanta Securities, acting as its clients’ agent, made approximately HK$3.1 million in commission by marking-up or marking-down the execution prices in some of the 256 bond transactions for 96 clients without making accurate disclosure to the clients.
The sales team did not always properly disclose the amount of the commission it earned from the trades in the trading instruction form and in the daily statements sent to the clients. Also, the clients were charged extra fees by Yuanta Securities without their knowledge and consent as they were not informed of the financial product team’s mark-up/mark-down.
The SFC rules that Yuanta Securities has failed to:
- avoid and disclose conflicts of interest and treat its clients fairly or act in their best interests;
- provide accurate information to the clients regarding the actual execution price and the full amount of the fees or charges it made in respect of the transactions;
- set out the actual execution price and the commission and charges in the daily statements sent to clients.
For the full announcement from Hong Kong’s SFC, click here.
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