Hong Kong's Securities And Futures Commission Reprimands And Fines Lau Ki Fung $80,000

The Securities and Futures Commission (SFC) has reprimanded Mr Lau Ki Fung, a former account executive of KGI Asia Limited (KGI), and fined him $80,000 for failing to keep proper records of order instructions from clients (Notes 1 & 2).

The SFC found that between 29 July 2015 and 10 August 2015, Lau received 156 order instructions from four clients on mobile phone or during meetings outside KGI’s office and failed to use a telephone recording system to record these order instructions as required by the Code of Conduct and KGI’s internal requirements (Note 3).

In deciding the disciplinary action against Lau, the SFC took into account all relevant circumstances, including Lau’s remorse and acceptance of his failure, as well as his otherwise clean disciplinary record.

Notes:

1. Lau 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 KGI Asia Limited and KGI Futures (Hong Kong) Limited between 31 January 2013 and 21 September 2016.  Lau is currently accredited to Caitong International Securities Co., Limited to carry on Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities.
2. Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (Code of Conduct).
3. Paragraph 3.9 of the Code of Conduct requires a licensed person to use a telephone recording system to record order instructions which are received from clients through the telephone.  The use of mobile phones for receiving client order instructions is strongly discouraged.  However, where orders are accepted by mobile phones, staff members should immediately call back to their licensed person’s telephone recording system and record the time of receipt and the order details.  The use of other formats (e.g. in writing by hand) to record details of clients’ order instructions and time of receipt should only be used if the licensed person’s telephone recording system cannot be accessed.