Hong Kong's Securities And Futures Commission Suspends Ernest Ho Gar Fai For Four Months

The Securities and Futures Commission (SFC) has suspended Mr Ernest Ho Gar Fai for four months from 24 March 2016 to 23 July 2016 (Note 1).

The SFC investigation found that from September to December 2013, Ho allowed a client, who is his mother’s friend, to trade in futures contracts through his mother’s account held with Fulbright Futures Limited (Fulbright Futures).  He also failed to properly receive and keep records of the client’s order instructions.

Although Ho’s mother allowed the client to trade through her futures account, it is inexcusable for Ho to have allowed the trades to be conducted in such a way.  Ho’s conduct falls short of the standard set out in the Code of Conduct and casts doubt on his fitness and properness as a licensed person (Note 2).

In deciding the sanction, the SFC took into account all relevant circumstances, including that Ho had no previous disciplinary record with the SFC.

Notes:

1. Ho is 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 has been accredited to Fulbright Securities Limited for Type 1 regulated activity and Fulbright Futures Limited for Type 2 regulated activity since 2007.
2. General Principle 2 (diligence) of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission provides that a licensed person should act with due skill, care and diligence in conducting business activities.  Among others, paragraph 3.9 provides that licensed person should record and immediately time stamp records of order instruction particulars, and paragraph 5 provides a licensed person should take steps to establish the true and full identity of each client, and before effecting a transaction, be satisfied on reasonable grounds as to the identity of the person ultimately responsible for originating transaction instructions and the identity of the person who stand to gain the commercial or economic benefit and/or bear the commercial or economic risk of the transaction.