The Securities and Futures Commission (SFC) of Hong Kong has reprimanded Ping An of China Securities Company and fined it $6 million over serious internal control deficiencies and other matters.
An SFC investigation found that, between 1 August 2010 and 30 April 2011, Ping An failed to:
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- establish anti-money laundering internal control procedures;
- actively identify and report to the SFC and the Joint Financial Intelligence Unit suspicious transactions in a timely manner;
- provide anti-money laundering training to its staff;
- establish and follow appropriate and effective procedures to protect client assets in effecting payments;
- effectively communicate and enforce its internal policies on employee dealings;
- enforce its account opening procedures in relation to address proofs; and
- have in place an effective compliance function.
In deciding the disciplinary sanction, the SFC took into account all relevant circumstances including Ping An’s otherwise clean record, the steps taken by Ping An to remedy its internal control deficiencies, including the appointment of a new management team and a new chief executive officer, as well as its agreement to engage an independent reviewer to confirm the new procedures have been implemented and are working properly.
Mr Mark Steward, the SFC’s Executive Director of Enforcement, said, "This was a case of serious internal control failures. Ping An has reacted properly and, in doing so, has saved itself from a harsher outcome. This case should send a clear warning to the industry that cavalier attitudes have no place in our market."
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By GlobalData
