Regulatory Alerts2018-08-10
Added · Updated
Circular Issued by the Securities and Futures Commission on Margin Financing Activities Disguised as Investments
The Securities and Futures Commission warns licensed corporations against aiding unlicensed affiliates or third parties in providing illegal securities margin financing disguised as investments. These illicit arrangements typically involve concentrated positions, margin calls, and guaranteed yields, constituting unlicensed Type 8 regulated activities that circumvent capital and risk management requirements. The regulator emphasizes that facilitating such schemes breaches the Securities and Futures Ordinance, jeopardizes the fitness and properness of licensed corporations, and exposes involved parties to prosecution.
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