Standard Chartered Securities Hong Kong (SCSHK), the securities brokerage unit of Standard Chartered, has been fined HKD2.6m ($332,306) by Securities and Futures Commission (SFC) for failing to meet short selling disclosure rules and failing to meet Financial Resources Rules (FRR) between January 2014 and August 2015.
SFC found that SCSHK’s failure to implement adequate procedures led to at least 61 regulatory breaches related to short sales by 11 traders from different trading desks.
The regulator also found SCBHK flouting the FRR by incorrectly including the amounts receivable from its clearing agent as liquid assets in its financial returns.
Excluding the receivables from SCBHK’s liquid assets, the company reported a liquid capital deficit of $2bn at the end of August 2015.
However, the regulator also took into account SCSHK’s cooperation in resolving the issues, the firm’s remedial measures in deciding the penalty.