Bank of East Asia fined HK$4.2m for stock dealing breaches

The Securities and Futures Commission has reprimanded the Bank of East Asia (0023) and fined it HK$4.2 million for regulatory breaches related to its failure to segregate client securities.

Following a referral from the Hong Kong Monetary Authority and a self-report by BEA, the SFC investigated. It found that BEA had failed to segregate client securities from proprietary securities in accounts maintained at two external custodians, the Central Clearing and Settlement System and Sumitomo Mitsui Banking Corporation, Tokyo, respectively, from April 1, 2003 to December 15, 2016.

Although BEA had identified the client securities in its internal electronic accounting records, it did not comply with regulatory requirements in that licensed corporations are required to safe-keep client securities in a segregated account designated as a trust account or client account, the regulator said.