Hong Kong’s Securities and Futures Commission levies a $5 million fine upon Southwest Securities (HK) Brokerage Limited for AML/CFT non-compliance


Hong Kong’s Securities and Futures Commission (SFC) has penalized Southwest Securities (HK) Brokerage Limited (SSBL) with a fine of $5 million for non-compliance with anti-money laundering and counter-terrorist financing (AML/CFT) requirements in 2016.

SSBL did not install efficient policies to mitigate third-party money-laundering and terrorist financing risks. It was also supposed to monitor all suspicious activities and promptly report them to the Joint Financial Intelligence Unit (JFIU). However, it severely lacked effective systems for such monitoring. In fact, in 2016, SSBL failed to identify and review the funding sources for 89% of the third-party deposits (worth $110.1 million) for its clients. It also failed to effectively delegate and communicate the responsibilities of its different staff members for monitoring suspicious transactions.

In light of these discoveries, the SFC has found SSBL to be in violation of its AML/CFT Ordinance, the Guideline on AML/CFT and the Code of Conduct. With this fine, the SFC has sent a stringent message that AML/CFT policies cannot be taken lightly.