Hong Kong Securities And Futures Commission Reprimands And Fines RBC Investment Services (Asia) Limited $7.7 Million For Mishandling Client Assets

The Securities and Futures Commission (SFC) has reprimanded RBC Investment Services (Asia) Limited (RBC) and fined it $7.7 million for regulatory breaches relating to mishandling of client assets (Note 1).

The SFC’s investigation found that between January 2018 and August 2020, RBC had failed to segregate client money as required under the Securities and Futures (Client Money) Rules (Client Money Rules) on 86 occasions, involving individual transaction amounts ranging from $146 to $52 million.

The SFC also found that between 3 December 2012 and 26 March 2020, RBC had breached the Securities and Futures (Client Securities) Rules (Client Securities Rules), by transferring securities from 65 client accounts held by non-professional investor clients to SEHK Options Clearing House Limited as collateral without valid standing authority.

In deciding the disciplinary sanction, the SFC took into account all relevant circumstances, including:

• RBC’s remedial actions and self-report to the SFC regarding its breaches of the Client Money Rules and Client Securities Rules;
• RBC’s co-operation in resolving the SFC’s concerns and accepting the SFC’s findings and disciplinary action; and
• there is no evidence of client loss from RBC’s non-compliance.

Notes:

1. RBC is licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities) and Type 5 (advising on futures contracts) regulated activities.
2. Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission.
3. Please refer to the Statement of Disciplinary Action for the relevant regulatory requirements.