The Securities and Futures Commission (SFC) has reprimanded and fined Changjiang Asset Management (HK) Limited (CJAM) $3.4 million for regulatory breaches and internal control failings in relation to segregation of client money and provision of statements of accounts to clients.
The regulator found that between May 2015 and August 2017, CJAM had:
- under-segregated client money to the extent of $300 to $1.05 million on multiple occasions;
- failed to segregate client money it had received in amounts ranging from $651,518 to $8.5 million within the prescribed time limit on three occasions; and
- failed to immediately notify the SFC after it became aware of its under-segregation of client money.
In doing so, CJAM breached the Securities and Futures (Client Money) Rules and the Code of Conduct.
CJAM also breached the Securities and Futures (Contract Notes, Statements of Account and Receipts) Rules and the Code of Conduct because the SFC’s investigation revealed that CJAM had issued inaccurate statements of accounts to three clients between December 2016 and February 2017 and failed to provide statements of accounts to four clients within the prescribed time limit on 19 occasions between January and June 2017.
In deciding the disciplinary sanction, the SFC took into account all relevant circumstances, including CJAM’s acceptance of liability and otherwise clean disciplinary record.
