The Securities and Futures Commission (SFC) has reprimanded and fined Mr Lui Chi Hang $300,000 for account opening failures and lending money to a client (Notes 1 & 2).
The disciplinary action follows an investigation by the SFC which found that Lui, a former relationship manager of ABN Amro Bank N.V. (the Bank), failed to follow the account opening procedures required under the Code of Conduct to verify the identities of his clients who resided in Taiwan (Note 3).
The SFC also found that Lui had a potential conflict of interest by lending money to a client in his personal capacity on three occasions (Note 4).
The SFC is of the view that Lui’s conduct fell short of the standard expected of him under the Code of Conduct and was also in breach of the Bank’s internal policies (Note 5).
In deciding the disciplinary sanction, the SFC took into account Lui’s cooperation with the SFC in resolving the disciplinary action and his otherwise clean disciplinary record.
The case was referred to the SFC by the Hong Kong Monetary Authority.
Notes:
- At the material time, Lui was a relevant individual engaged by ABN Amro Bank N.V. (now known as The Royal Bank of Scotland N.V.) to carry on Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities under the Securities and Futures Ordinance (SFO). His registration with the HKMA ceased on 22 September 2008.
- Lui is accredited to BOCI Securities Limited as a representative for Type 1 (dealing in securities) and Type 2 (dealing in futures contracts) regulated activities since 2 December 2008 and 15 December 2010 respectively.
- Paragraph 5.1 of the Code of Conduct for Persons Licensed by and Registered with the SFC (Code of Conduct) requires a licensed or registered person to take all reasonable steps to establish the true and full identity of each of its clients. In particular, when the account opening documents are not executed in the presence of the licensed or registered person, the new client’s identity must be verified by following the procedures set out under paragraph 5.1 of the Code of Conduct.
- General Principle 6 of the Code of Conduct requires that a licensed or registered person should try to avoid conflicts of interest, and when they cannot be avoided, should ensure that his clients are fairly treated.
- General Principle 2 of the Code of Conduct requires a licensed or registered person to act with due skill, care and diligence, in the best interests of his clients and the integrity of the market.