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The Securities and Futures Commission (SFC) has reprimanded Mr Law Kwan Ming, a licensed representative of UOB Kay Hian (Hong Kong) Limited (UOB), and fined him $50,000 for failing to make and keep a proper record of orders received by mobile phone (Note 1).
The disciplinary action follows an SFC investigation into client orders handled by Law at UOB on 2 September 2011. The SFC found that Law had accepted instructions from a client to buy 23 million shares of China Technology Solar Power Holdings Limited via his mobile phone. Law failed to make any record of his client’s order instructions which was in breach of the Code of Conduct (Note 2).
The obligation to make and keep a proper record of all orders, especially those made via a mobile phone, in accordance with the obligation in the Code of Conduct is not a technical or trivial matter. This case demonstrates that the SFC will enforce this obligation when it is breached.
In deciding the penalty, the SFC took into account that Law has a clean disciplinary record.
Notes:
- Law is currently licensed under the Securities and Futures Ordinance to carry on Type 1 (dealing in securities) regulated activities.
- Paragraph 3.9 of the Code of Conduct for Persons Licensed by and Registered with the SFC requires a licensed or registered person to record and immediately time stamp records of the particulars of the instructions for agency orders. Where order instructions are received from clients through the telephone, a licensed person should use a telephone recording system to record the instructions and maintain telephone recordings as part of its records for at least six months (revision took effect on 1 December 2012). Where orders are accepted by mobile phones, the time of receipt and the order details should be recorded immediately (e.g. by a call to the office system or in writing by hand).
- A copy of the Statement of Disciplinary Action in relation to the matter is available on the SFC website.
