Interactive Brokers Hong Kong gets fine of $4.2m for regulatory breaches

The Securities and Futures Commission has reprimanded and fined Interactive Brokers Hong Kong HK$4.2 million for regulatory breaches in relation to the handling of client assets.

The commission's investigation found that between December 3, 2017, and October 23, 2020, IBHK relied on expired standing authority of 7,911 clients and loaned their securities listed on the stock exchange pursuant to a securities borrowing and lending agreement, according to a statement on Monday. 

The incident arose from IBHK’s failure to send these clients renewal notices of the standing authority during the material time due to an error in programming.

IBHK’s failure constitutes breaches of the Securities and Futures (Client Securities) Rules and the Code of Conduct, the SFC said. 

In deciding the disciplinary sanction, the market watchdog has taken into account all relevant circumstances, including IBHK’s remedial actions and self-report to the SFC. There was no evidence of client loss as a result of such conduct. The SFC also said IBHK worked cooperatively to resolve its concerns. 

STAFF REPORTER