SFC licensing and compliance hints

SFC finding more breaches: The SFC conducted 296 risked-based on-site inspections of licensed companies during its last financial year (up by 9% compared to 2012/13) according to its Annual Report for 2013/14. However the number of breaches noted during inspections has nearly doubled. The SFC identified 88 breaches relating to on-line trading – new electronic trading regulations came into effect on 1 January 2014. Other significant breaches include failure to safekeep client securities (up by 136%), breach of corporate finance adviser code of conduct (a hike of 133%), and non compliance with AML guidelines (88 breaches – a huge increase of 577%). This overall increase in the number of breaches seems aligned with the SFC's stated aim of increasing oversight of intermediaries. The SFC has said it wants to encourage firms to enhance their management and internal controls and to improve their professional ethics and standards.