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Guoyuan Securities Brokerage (Hong Kong) fined for breaching guidelines


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Guoyuan Securities Brokerage (Hong Kong) fined for breaching guidelines

Hong Kong's Securities and Futures Commission fined Guoyuan Securities Brokerage (Hong Kong) Ltd. HK$4.5 million for breaching anti-money laundering guidelines.

The regulator said April 5 that it fined the brokerage for failing to conduct proper inquiries and scrutiny when processing unusual fund transfers between its clients and unverified third parties between September 2010 and July 2012.

The brokerage routinely processed the third-party fund transfers, which were purportedly repayment to or receipt from "friends" or "business partners," without making further inquiries.

The SFC noted that two clients' accounts alone recorded an aggregate of fund transfers to and from third parties totaling HK$665.3 million.

Despite suspicious patterns suggesting the two clients' accounts were used as depository accounts or conduits for transfers, the brokerage failed to identify them as suspicious transactions and adequately record inquiries that were allegedly made on the transactions, the regulator said. It added that the brokerage also failed to properly implement and communicate policies and procedures regarding anti-money laundering and counter-terrorist financing to relevant staff members.

The regulator said that since the breach of the guidelines, the brokerage has implemented new anti-money laundering and counter-terrorist financing policies and procedures, taken steps to remedy its internal control deficiencies and agreed to engage an independent reviewer to conduct a review of its internal controls.

Guoyuan Securities Brokerage (Hong Kong) is a unit of Guoyuan Securities (HK) Co. Ltd., a subsidiary of China's Guoyuan Securities Co. Ltd.