Hong Kong Regulatory Authority

SFC condemns Guosen Securities (HK) (Hong Kong) Broker Limited for Regulatory Violation and Fine of $2.8 MillionDecember 21, 2022 Securities and Futures Commission (SFC) Reprimanded Guosen Securities (HK) (Hong Kong) Brokerage Co., Ltd. (Guosen) was also fined 2.8 million yuan because Guosen violated regulatory requirements in handling client assets and providing client account statements (Note 1). The SFC’s investigation found that between January 1, 2021 and March 7, 2021, Guosen relied on the expired standing authorizations of 1,009 clients to re-pledge their securities collateral to a certain company in order to obtain financial accommodation. bank as collateral. The SFC also found that between May 2020 and November 2020, Guosen provided 930 customers with incomplete and incorrect monthly statements. Guosen's omissions violated the Securities and Futures (Client Securities) Rules ("Client Securities Rules"), the Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules ("Contract Notes Rules") and the Code of Conduct Guidelines" (Notes 2 and 3). The SFC took into account all relevant circumstances when deciding on the above disciplinary action, including: Guosen took remedial action for its violations of the Client Securities Rules and the Contract Notes Rules and proactively reported to the SFC; The above incidents appear to be isolated incidents; there is no evidence that Guosen’s regulatory violations have caused losses to clients; and Guosen has cooperated with the SFC to address the SFC’s concerns and accepted its findings and disciplinary action. End note: Guosen is licensed under the Securities and Futures Ordinance to operate Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities) and Type 5 (dealing in futures contracts) advising) regulated activities. Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission. The disciplinary action statement is available on the SFC website Last updated on 21 December 2022