Posted inRegulation

RM fined by Hong Kong’s SFC

A former relationship manager at ABN Amro Bank failed to follow proper account opening procedures, according to the regulator.

Lui Chi-Hang has been reprimanded and fined HK$300,000 ($38,700) by the Securities and Futures Commission.

Lui, an ex-relationship manager at ABN Amro Bank, “failed to follow the account opening procedures required under the Code of Conduct to verify the identities of his clients who resided in Taiwan”, the regulator said in a statement.

Around 2008 (the date was not specified), three Taiwan residents, who were siblings of one of Lui’s clients, wanted to open accounts with the bank. Lui was also the relationship manager of the siblings and handled the account opening procedures for them.

“The SFC found that Lui was not present when the client’s siblings executed the account opening documents in Taiwan. Lui had taken certain steps to verify the identities of the client’s siblings, such as confirming their instructions over the phone and sending/collecting the account opening documents to/from the client’ssiblings’ specified addresses by courier.

“However, Lui did not ensure that the signing of the client agreements and the related identity documents were properly certified, nor did Lui properly verify the identity and signature of each of the client’s siblings [as the Code of Conduct specifies].

“The evidence does not suggest that the accounts of the client’s siblings were the client’s nominee accounts.”

The Code of Conduct “requires a licensed or registered person to take all reasonable steps to establish the true and full identity of each of its clients. In particular, when the account opening documents are not executed in the presence of the licensed or registered person, the new client’s identity must be verified by [following specific procedures]”.

In addition, the regulator said on three occasions Lui lent money to a client in his personal capacity, creating a potential conflict of interest.

The date of the account-opening incident was not provided. But the SFC said at the time, “Lui was employed by ABN Amro Bank (now known as The Royal Bank of Scotland) to carry out Type 1 (dealing in securities) and Type 4 (advising on securities) regulated activities”.

His registration with the Hong Kong Monetary Authority ceased on 22 September 2008.

Lui has been accredited to BOCI Securities as a representative for Type 1 and Type 2 (dealing in futures contracts) regulated activities since 2 December 2008 and 15 December 2010 respectively, the SFC said.

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