The Securities and Futures Commission (SFC) has reprimanded and fined UBS Securities Hong Kong Limited (UBS) HK$1.6 million for regulatory breaches and internal control failings relating to position limit failures (Note 1).
Go deeper with GlobalData
Access deeper industry intelligence
Experience unmatched clarity with a single platform that combines unique data, AI, and human expertise.
The disciplinary action follows an SFC investigation into the holding of UBS on behalf of its client, UBS AG London, of 175,697 contracts in China Construction Bank stock options in breach of the prescribed position limit of 150,000 contracts on 18 October 2011 (Notes 2, 3, 4 & 5).
The SFC also found that UBS failed to implement adequate internal controls to ensure that all opened positions in stock options contracts it held or controlled were in compliance with the prescribed position limits (Notes 6 & 7).
In particular, the SFC found that UBS:only implemented a real time monitoring system for one trading desk, the Equities Volatility Trading Desk, and failed to extend the monitoring system to other trading desks, even though it knew these trading desks were actively trading single stock options listed on the Stock Exchange of Hong Kong Limited (SEHK) since December 2010.
And in the absence of a real time monitoring system, failed to implement adequate procedures to guide trading staff of its other trading desks on how and who to approach for monitoring and checking position limits.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalDataIn deciding the penalty, the SFC has taken into account UBS’s co-operation and that it has since strengthened its internal controls on the monitoring of position limits.
