Hong Kong’s Securities And Futures Commission Bans Poon Kin Lung For Two Years

The Securities and Futures Commission (SFC) has prohibited Mr Poon Kin Lung, a former account executive of Phillip Securities (Hong Kong) Limited (Phillip), from re-entering the industry for two years from 15 December 2016 to 14 December 2018 over breaches of the SFC’s Code of Conduct (Notes 1 & 2).

The SFC found that from 1 January 2014 to 28 June 2014, Poon had effected transactions for two of his clients without obtaining the proper authorization required under the Code of Conduct.  Although the clients had given Poon a degree of discretionary authority to conduct trades in their accounts, Poon did not have their written authorization to operate their accounts on a discretionary basis, and there were uncertainties as to the scope of the authority given to him. 

Poon’s conduct was also in breach of Phillip’s internal policies which did not permit him to operate the clients’ accounts on a discretionary basis.

The SFC further found that Poon had received order instructions from one of these two clients and another client via WhatsApp and mobile phone, but he had failed to keep a proper record of their instructions in accordance with Phillip’s internal policies.

The SFC considers that Poon had failed to act with due skill, care and diligence in performing his duties as a licensed representative and to meet the standards required of him under the Code of Conduct.  As a result, his fitness and properness as a licensed person has been called into question (Note 3). 

Notes:

1. Poon was licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) and Type 2 (dealing in futures contracts) regulated activities, and was accredited to Phillip Securities (Hong Kong) Limited and Phillip Commodities (HK) Limited until 28 June 2014.  Poon is currently not licensed by the SFC.
2. Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission
3. General Principle 2 (diligence) of the Code of Conduct provides that a licensed person should act with due skill, care and diligence in conducting his business activities. Paragraph 3.9 of the Code of Conduct requires a licensed person to record and immediately time stamp records of order instruction particulars.  Paragraph 7.1 provides that a licensed person should not effect a transaction for a client unless before the transaction is effected: (i) the client, or a person designated in writing by the client, has specifically authorized the transaction; or (ii) the client has authorized the licensed or registered person in writing (or someone in its employ) to operate his or her account on a discretionary basis.