2022 HKEX and SFC Disciplinary and Enforcement Actions (May - August 2022)

On 1 March 2023, Julia Charlton presented a webinar on the HKEX and SFC Disciplinary & Enforcement Actions between May and August 2022. This webinar provided a brief introduction and overview of the trends of the disciplinary and enforcement actions of the HKEX and the SFC from May to August 2022, and considered various enforcement cases of the HKEX and the SFC with an aim to give you an understanding and awareness on the enforcement areas and breaches which were focused by the Stock Exchange and the SFC during the said period.Show more

In May 2022, the Stock Exchange took disciplinary actions against several companies and their directors, including Wuzhou International Holdings Limited, CIL Holdings Limited, CR Construction Group Holdings Limited and Zhejiang State-owned Capital Operation Company Limited. These cases underscored the significance of adhering to the disclosure requirements of the Listing Rules, and maintaining robust internal control systems.

In June 2022, we witnessed disciplinary actions against Mingfa Group (International) Company Limited and four former directors for failing to report various transactions to the board of directors and failing to comply the disclosure requirements under the Listing Rules. In addition, the SFC publicly reprimanded and fined China Everbright Securities (HK) Limited for failing to implement adequate and effective systems in anti-money laundering and counter-financing of terrorism, and CES Capital International (Hong Kong) Co., Limited for failing to discharge its duties as an investment manager of two funds.

In July 2022, RBC Investment Services (Asia) Limited was reprimanded and fined for improper handling of client assets. Concurrently, Rifa Futures Limited was given a penalty for inadequate due diligence and failure to implement secure login methods for clients' internet trading accounts. KTF Capital Management Limited also received a fine for non-compliance with financial resources requirements, while Mr. Chan Ka Hey was banned from re-entering the industry for six months due to his deceptive practices on handling a customer's signature.

Lastly, in August 2022, the SFC reprimanded and fined TC Capital International Limited and suspended its responsible officer for failing to discharge duties as the sponsor in connection with the HKEX IPO application for China Candy Holdings Limited. This case accentuated the need for sponsors to conduct reasonable due diligence and maintain proper records.

The period between May and August 2022 saw HKEX and SFC take a firm stance on corporate governance, internal control systems, and compliance with the HKEX Listing Rules. These disciplinary actions and enforcement efforts serve as a reminder for companies and directors to ensure they adhere to the relevant regulations and maintain high standards of corporate conducts.

#hkex #sfc #enforcementactions

Timecodes:
00:00 Julia Charlton's welcome speech
00:44 Overview of enforcement trends - May to august 2022
01:43 HKEx’s Disciplinary Action Against Wuzhou International Holdings Limited and Nine Former Directors
08:46 Stock Exchange’s Disciplinary Action against Two Directors of CIL Holdings
14:02 Stock Exchange ’s Disciplinary Action Against CR Construction Group Holdings Limited, Six Directors and Zhejiang State-owned Capital Operation Company Limited
20:42 Stock Exchange’s Disciplinary Action against Four Former Directors of Mingfa Group (International) Company Limited
27:03 SFC Disciplinary Action To Reprimand and Fine China Everbright Securities (HK) Limited for HK$3.8 Million
30:32 SFC Disciplinary Action To Reprimand and Fine CES Capital International (Hong Kong) Co., Limited for HK$3.2 Million
36:06 SFC Reprimands and Fines RBC Investment Services (Asia) Limited HK$7.7 Million for Mishandling Client Assets
40:41 SFC Reprimands and Fines Rifa Futures Limited HK$9 Million
45:10 KTF Capital Management Reprimanded and Fined for Non-Compliance With Financial Resources Requirements
49:34 Chan Ka Hey Banned from Re-entering the Industry for 6 Months
51:44 SFC Reprimands and Fines TC Capital International Limited HK$$3 million and Suspends Its Responsible Officer for Sponsor Failures on an HKEX IPO application

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Julia Charlton
https://www.charltonslaw.com/the-firm/people-culture/team-profile/julia-charlton/

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