Hong Kong SFC Pledges Increased Protection For Investors

by Mary Swire, for LawAndTax-News.com, Hong Kong

17 August 2006

Hong Kong's Securities and Futures Commission has pledged that measures will be taken to boost investor protection against misappropriation by stockbrokers.

In a presentation on Tuesday, the Commission's Intermediaries and Investment Products Director, Alexa Lam explained that the important aspects to addressing the issue are continuing rigorous supervision of brokers, maintaining dialogue with the accounting profession, and educating investors on how to protect their own interests.

She went on to reveal that the Commission has devoted additional resources to the supervision of brokers, and added that decisive and tough actions will be taken against dishonest practitioners.

Ms Lam additionally noted the auditing profession's obligation to review how a broker handles its client assets and report any regulatory breaches to the Commission, and stated that the SFC will discuss with the Institute of Certified Public Accountants measures to strengthen co-operation.

Suspected cases of auditors' professional negligence will be referred to the institute and auditors will be asked to conduct client circularisation in annual audits.

The Intermediaries and Investment Products Director concluded by announcing that in order to protect their own interests, investors should:

• Open an investor participant account;
• Ensure timely receipts of the originals of monthly statements, verify the information immediately, and never allow brokers to hold them; and,
• Perform checking immediately and revert to the auditors direct upon request from the auditors for verification of account positions.

Recommended