The Securities and Futures Commission (SFC) has reprimanded RBC Investment Services (Asia) and fined it HK$7.7m (£820,000, $980,000, €960,000) for regulatory breaches relating to mishandling of client assets.
The SFC’s investigation found that between January 2018 and August 2020, RBC had failed to “segregate client money” as required under SFC rules “on 86 occasions, involving individual transaction amounts ranging from HK$52m $146m”.
The Hong Kong regulator also found that between 3 December 2012 and 26 March 2020, RBC breached the SFC, by “transferring securities from 65 client accounts held by non-professional investor clients to SEHK Options Clearing House Limited as collateral without valid standing authority”.
In deciding the disciplinary sanction, the SFC took into account all relevant circumstances, including:
- RBC’s remedial actions and self-report to the SFC regarding its breaches of the client money rules and client securities rules;
- RBC’s co-operation in resolving the SFC’s concerns and accepting the SFC’s findings and disciplinary action; and
- There is no evidence of client loss from RBC’s non-compliance.
A spokesperson for RBC said: “We are pleased to have resolved this matter in cooperation with the SFC, having promptly self-reported the issues upon identification to the regulator in line with our internal compliance processes. There were no client losses as a result of these matters.
“Since identifying and reporting these issues to the regulator, RBC Wealth Management has taken steps to further simplify and strengthen processes and controls and enhance the client experience. This includes integrating its brokerage (ISAL) business into its private banking operating model in Asia in 2021.
“RBC is committed to ensuring a strong culture of compliance with appropriate supervision and controls in line with the applicable laws and regulations in any jurisdiction in which it operates, and has a zero-tolerance approach to regulatory infractions and behaviour that breaches our internal code of conduct.”
