The Securities and Futures Commission (SFC) has reprimanded Optimas Capital Limited (Optimas) and fined it $1.05 million over failures to ensure short position reports (SPRs) for a collective investment scheme (CIS) under its management were accurate and compliant with the requirements under the Securities and Futures (Short Position Reporting) Rules (SPR Rules) (Notes 1 & 2).
An SFC investigation following a self-report by Optimas found that a total of 350 reportable short positions held by the CIS had been omitted in 56 SPRs prepared and submitted by Optimas to the SFC between 23 June 2017 and 9 July 2018.
The errors found in the SPRs prepared by Optimas occurred as a result of a programming mistake in a script developed by its operations manager at the material time. The script in question was created to automate the process of identifying short positions held by the CIS in order to filter out those that were reportable. However, Optimas failed to detect the programming mistake promptly due to inadequate supervision and review over the work of its then operations manager.
The SFC considers that Optimas had failed to act competently to ensure the SPRs it prepared would be accurate and compliant with the applicable requirements under the SPR Rules.
In deciding the sanction, the SFC took into account all relevant circumstances, including Optimas’ prompt remedial actions and cooperation with the SFC in resolving the SFC’s concerns and its otherwise clean disciplinary record.
Notes:
- Optimas is licensed under the Securities and Futures Ordinance to carry on business in Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities.
- Please refer to the Statement of Disciplinary Action for the relevant provisions of the SPR Rules.
A copy of the Statement of Disciplinary Action is available on the SFC website
