Hong Kong’s securities regulator has reprimanded Ping An of China Securities (Hong Kong) and fined it $6 million over serious internal control deficiencies and other matters.
A Securities and Futures Commission (SFC) investigation has found that, between 1 August 2010 and 30 April 2011, Ping An failed to:
- establish anti-money laundering internal control procedures;
- actively identify and report suspicious transactions in a timely manner;
- provide anti-money laundering training to its staff;
- establish and follow appropriate and effective procedures to protect client assets in effecting payments;
- effectively communicate and enforce its internal policies on employee dealings;
- enforce its account-opening procedures in relation to address proofs; and
- have in place an effective compliance function.
In deciding the sanction, the SFC took into account circumstances including Ping An’s otherwise clean record and the steps taken by the firm to remedy its deficiencies. These included the appointment of a new management team and a new chief executive and Ping An’s agreement to engage an independent reviewer to confirm the new procedures have been implemented and are working properly.
Mark Steward, the SFC’s executive director of enforcement, said: “This was a case of serious internal control failures. Ping An has reacted properly and, in doing so, has saved itself from a harsher outcome.”
The SFC has acknowledged and publicly thanked the China Securities Regulatory Commission for its assistance in the investigation of this case.
Ping An is licensed under the Securities and Futures Ordinance (SFO) to carry on business in type 1 (dealing in securities), type 4 (advising on securities) and type 9 (asset management) activities.