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SFC

SFC

SFC fines Morgan Stanley HK$18.5 million for control failures

PUBLISHED : Wednesday, 24 August, 2016, 7:10pm
UPDATED : Wednesday, 24 August, 2016, 7:09pm

The Securities and Futures Commission on Wednesday fined Morgan Stanley Hong Kong Securities HK$18.5 million for internal control failures between 2010 and March 2016.

The commission also reprimanded the company for failing to have adequate internal controls in place to prevent conflicts of interest in June 2013, and for a lack of comprehensive documentation for its electronic trading systems in January 2014.

Other internal control failures included the disclosure of 29,000 short selling positions between January and November 2014, the SFC said in a statement.

Morgan Stanley also failed to comply with position limits on its derivatives trading in February 2015 and to follow the instruction of an asset manager to report large open positions on a delegated basis from June 2012 to March 2016.

In reaching its decision, the SFC said Morgan Stanley had been co-operative during its investigation.

“Morgan Stanley Hong Kong agreed to engage an independent reviewer to conduct a forward-looking review of its internal controls to ensure compliance with the relevant regulatory requirements,” the regulator said in its statement.

“Morgan Stanley Hong Kong has no disciplinary record in respect of the present failures.”

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