Keep A Close Watch On Your Trading Accounts, Hong Kong's SFC Tells Investors

Mary Swire, Tax-news.com, Hong Kong

21 March 2001

Hong Kong's Securities and Futures Commission (SFC) has published a new leaflet reminding retail investors to closely monitor their securities trading accounts to avoid stocks or funds being traded or used without their authority.

Entitled "Take Care of Your Money", the leaflet is available in English and Chinese and forms part of the SFC's series of initiatives in its investor education programme. Tips for investors to protect themselves against misappropriation include:

• Never make out cheques payable to the account executive, or deposit money directly into the bank account of an account executive.
• Always make payment directly to the broker firm. It is also unwise to give blank signed cheques to anybody.
• Do not allow contract notes and statements of accounts to be personally delivered by the account executive. This could create an opportunity for interception and subsequent changes.
• Never allow other persons, including the account executive, to use the account for transactions other than the investors' own transactions.
• Ensure transaction documents are issued in a timely manner. Keep these documents and verify the information in them.

When the SFC announced the launch of the new leaflet, it also reminded investors that it has an "Investor Alert" sub-section within the Investor Education section on its website to warn investors about unregistered stockbrokers and financial advisers that are based outside Hong Kong but use the facilities of Hong Kong business centres or secretarial firms to make them appear to be operating from within the jurisdiction. The SFC says it is illegal for a firm to deal in securities in Hong Kong or to claim that it does when it is not actually registered with the SFC as a securities dealer and warns that an investor will not be protected by the Securities Ordinance if he deals with an unregistered stockbroker.

All the SFC's investor publications are free of charge and can be easily accessed via the Investor Education section of the SFC website at http://www.hksfc.org.hk

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