SFC reprimands and fines BOCI Securities Limited HK$10 million for regulatory breaches in selling investment products

18 Mar 2019



The Securities and Futures Commission (SFC) has reprimanded and fined BOCI Securities Limited (BSL) HK$10 million over BSL’s internal system and control failures in its investment product selling practices (Note 1).

The SFC’s disciplinary action followed an investigation which found that BSL had failed to comply with various regulatory requirements concerning client profiling, product due diligence and suitability assessment in its sale and distribution of investment products, including bonds listed under Chapter 37 of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited (Chapter 37 Bonds) (Note 2).

In particular, BSL failed to:

In deciding the penalty, the SFC took into account all relevant circumstances, including that:

End

Notes:

  1. BOCI Securities Limited is licensed under the Securities and Futures Ordinance (SFO) to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities) and Type 5 (advising on futures contracts) regulated activities.
  2. The SFC’s investigation looked into BSL’s sale and distribution of: (i) Chapter 37 Bonds to clients during the period from 1 April 2015 to 31 March 2016 (Relevant Period 1); and (ii) equity-linked notes, mutual funds, bonds and accumulators/decumulators (collectively, Other Products) to clients during the period from 1 October 2016 to 31 December 2016 (Relevant Period 2).
  3. ECHP was designed to ensure that an intensive review is conducted by BSL into relevant transactions to ensure complaints are resolved in a fair and reasonable manner.  BSL shall apply the ECHP to all client complaints in relation to its sale and distribution of Chapter 37 Bonds during Relevant Period 1 and Other Products during Relevant Period 2.

A copy of the Statement of Disciplinary Action is available on the SFC website



Page last updated : 18 Mar 2019