Aggregated News From Investment Management Regulators

SFC reprimands and fines Mega International Commercial Bank Co., Ltd. $7 million for regulatory breaches over CIS sale


Please complete the required fields.

The Securities and Futures Commission (SFC) has reprimanded and fined Mega International Commercial Bank Co., Ltd. (MICBC) $7 million over MICBC’s internal system and control failures in relation to the sale of collective investment schemes (CISs) (Note 1).

Following a referral from the Hong Kong Monetary Authority (HKMA), the SFC conducted an investigation which found that, in the course of selling CISs to clients between August 2014 and July 2015, MICBC had failed to implement adequate and effective systems and controls to (Note 2):

  • properly assess its clients’ investment objective, risk tolerance level and knowledge of derivatives;
  • ensure the investment recommendations and/or solicitations made to its clients were reasonably suitable in all the circumstances;
  • conduct adequate product due diligence on certain funds;
  • ensure all relevant factors were properly taken into account before assigning the funds risk ratings; and
  • identify funds which constituted derivative products.

In deciding the sanction, the SFC took into account that:

  • MICBC took remedial actions to strengthen its suitability framework;
  • MICBC engaged an independent reviewer to validate whether the findings raised by the HKMA during the onsite examination are fully addressed and whether its control mechanisms operate effectively in accordance with its internal policies and procedures, and undertook to submit the validation review report to the SFC and the HKMA as soon as it is available;
  • there is no evidence that MICBC’s failures resulted in losses borne by its clients;
  • MICBC cooperated with the SFC in resolving its concerns; and
  • MICBC has no previous disciplinary record with the SFC.



  1. MICBC is registered under the Securities and Futures Ordinance to carry on business in Type 1 (dealing in securities) regulated activity.
  2. The case was referred to the SFC by the HKMA which conducted an investigation into MICBC after identifying various irregularities in MICBC’s selling practices of CISs during an onsite examination.

Source link

Regulator Information

Abbreviation: SFC
Jurisdiction: Hong Kong

Recent Articles

“We’ve Seen This Story Before” Remarks before the Piper Sandler Global Exchange & Fintech Conference

Washington D.C. Thank you, Rich, for that kind introduction.

OCC Hosts Risk Governance and Capital Markets Workshops in Denver

  • +1Bank Management, Banker Education, Board of Directors & Management, Community Banks, Operational Risk Management
WASHINGTON—The Office of the Comptroller of the Curren

SEC, NASAA, FINRA to Co-Host Webinar on Identifying and Reporting Suspected Senior Financial Exploitation

Regulators to Discuss Protecting Seniors During World Elder Abuse Awareness Day WASHINGTON—The Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASA

Financial sector’s capital position as at 31 March 2023: The Finnish financial sector’s capital position has remained good – risks in the operating environment...

The state of the Finnish financial sector has remained good in the early months of the year, despite the continued high level of risks...

Notification For The 2023 Capital Market Committee 2nd Webinar Meeting

The Director General has approved the 2023 Capital Market Committee (CMC) 2nd Webinar Meeting to hold on Wednesday, 23rd, August 2023. The usual interface with...

Get the latest from Regulatory.News in your inbox!