Hong Kong’s Securities and Futures Commission (SFC) has prohibited Mr Song Baojun (Song) 1 from re-entering the industry for 12 months pursuant to section 196 of the SFO.
A former relationship manager of The Hongkong and Shanghai Banking Corporation Limited (HSBC), Song was a relevant individual engaged to carry on Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities under the Securities and Futures Ordinance between 13 September 2011 and 12 June 2014. Song is currently not registered with the HKMA or licensed by the SFC.
SFC’s investigation revealed that Song had used incomplete application forms pre-signed by the client to effect unit trust transactions without first obtaining her specific authorization for the transactions. He also failed to advise the client to adopt a lower cost option when he effected two other unit trust transactions for her, with the result that the client incurred an extra cost of around $5,000. Song failed to inform his Client of the different methods of effecting the UT transactions, and to properly explain to her the cost that would be incurred in each option and advise her to adopt a less costly method to effect the 2 UT transactions on 23 April 2013.
Song’s conduct was found to be in breach of General Principles 2 and 5, and paragraphs 3.4 and 7.1(a)(i) of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (Code of Conduct). General Principle 2 of the Code of Conduct requires a licensed or registered person to act with due skill, care and diligence, in the best interests of its clients and the integrity of the market, in conducting business activities. General Principle 5 of the Code of Conduct requires a licensed or registered person to make adequate disclosure of relevant material information in its dealings with its clients.
The SFC is of the view that Song is not a fit and proper person to be a regulated person. In coming to the decision to take disciplinary action against Song, the SFC took into account all relevant circumstances, including Song’s otherwise clean disciplinary record. The SFC decided that Song breached the trust and confidence that his client had placed in him and that Song’s conduct has demonstrated weak compliance awareness. This ban is also to serve as a deterrent message to the market.
A copy of the Statement of Disciplinary Action is available on the SFC website
Date: 7 Nov 2019
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