TechFlow News, January 7th: According to the Hong Kong Securities and Futures Commission (SFC), the SFC has reprimanded Saxo Capital Markets (Hong Kong) Limited (Saxo Capital Markets) and imposed a fine of HK$4 million. This action was taken due to deficiencies in Saxo Capital Markets' distribution of non-SFC authorized virtual asset funds and virtual asset-related products (collectively referred to as virtual asset products) through its online trading platform (online platform).
During the period from November 1, 2018, to November 25, 2022 (the relevant period), Saxo Capital Markets allowed retail clients to trade certain virtual asset products on its online platform. According to two SFC circulars to intermediaries effective at the material times, these products should only have been sold to professional investors.
The SFC's investigation found that during the relevant period, Saxo Capital Markets executed 1,446 trades involving 32 virtual asset products on its online platform for six individual professional investors and 130 retail clients. All the products involved were complex products, including 21 exchange-traded derivative products (exchange-traded derivative virtual asset products).
Before executing these trades, Saxo Capital Markets did not assess whether the clients possessed the knowledge to invest in virtual asset products, nor did it provide clients with sufficient information or specific risk warnings regarding virtual assets. Consequently, it failed to comply with the guidance contained in the two aforementioned SFC circulars.
