SFC

The Securities and Futures Commission (SFC) is an independent statutory body set up in 1989 to regulate the city’s securities and futures markets. It works to ensure orderly securities and futures market operations, to protect investors and help promote Hong Kong as an international financial centre and a key financial market in China. It is funded by levies on transactions conducted on the Stock Exchange of Hong Kong and the Hong Kong Futures Exchange, and by licence fees..

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REGULATION

SFC suspends securities broker from trading

PUBLISHED : Wednesday, 20 March, 2013, 12:00am
UPDATED : Wednesday, 20 March, 2013, 5:28am

The Securities and Futures Commission has banned Salisbury Securities from trading in a bid to safeguard the interests of its clients.

The regulator issued a restriction notice against the firm to ensure any assets held by Salisbury Securities were not transferred while inquiries continued, the SFC said in a statement last night.

The commission said the firm had about 100 clients. According to the SFC website, the firm has licences for trading securities and asset management. It also advises on securities trading and corporate finance. Its two senior responsible officers are Albert John and Gordon Cruden while its traders include Alex Leung Yat-ming, Richard McAllister and Guy Stiles.

Fellow brokers said they had little knowledge about Salisbury except that it was set up in 2005.

The SFC informed the stock exchange about its decision to suspend the broker before the stock market opened yesterday.

Hong Kong Exchanges and Clearing, which operates the stock and futures markets as well as the related clearing houses, has also banned Salisbury from accessing the trading system and declared the firm a defaulter.

A restriction notice, issued under sections 204 and 205 of the Securities and Futures Ordinance, allows the SFC to ban a firm from trading or removing any assets from the company in a bid to safeguard the interest of investors.

The last time the SFC issued the restricted notice was in 2011 in relation to the Hong Kong operations of MF Global when the international firm collapsed.

The SFC has stepped up its effort to focus on the financial strength of brokers in recent years and the industry coped with the volatile markets in recent years

Under the two sections of the law, the SFC may impose a prohibition on a firm if it appears to the commission that any property of the firm or its clients "might be dissipated, transferred or otherwise dealt with in a manner prejudicial to the interest of any of its clients or creditors".

The SFC may also impose such a suspension if it considers "the licensed corporation is not a fit and proper person to remain licensed" or if the firm failed to comply with certain requirements of the SFC.

Neither the stock exchange nor the SFC said they had received any complaints from clients of Salisbury.

SFC staff visited the brokerage's office in Central to take away some documents.

Christopher Cheung Wah-fung, the legislator for brokers, said Salisbury had very small operations so its suspension would not affect the market.

"This case does not represent the brokerage industry as a whole," Cheung said. "The SFC has stepped up its effort to focus on the financial strength of brokers in recent years and the industry coped with the volatile markets in recent years."

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