Public reprimand for HSBC Securities Brokers (Asia) Limited

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The Securities and Futures Commission (SFC) has publicly reprimanded HSAL over settlement failures on 27th and 28th August 1998. The SFC found that HSAL had transferred shares from its Central Clearing & Settlement System segregated account to its CCASS clearing account to settle trades for other clients.

This practice had been established within HSAL to overcome various problems that were encountered in settlement with CCASS.

Senior management at HSAL have acknowledged that there was a failure to ensure that the settlement system prevented the unauthorized transfer of client’s securities.

In deciding to publicly reprimand HSAL, the SFC took into account that no losses were sustained by any clients, nor were they disadvantaged as a result of the practice adopted. Remedial measures were taken and control has been improved since February 1999, when a new management team was chosen.

HSAL immediately cooperated with the SFC in its inquiries, and launched its own internal investigation, the recommendations of which have been fully implemented.

IR Asia

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