The Hong Kong Securities and Futures Commission (SFC) has reprimanded and fined Impression Investment Limited (Impression) HKD 2 million for failing to diligently supervise staff and maintain effective internal controls over staff personal trading. It also prohibited Impression’s former director, responsible officer and manager-in-charge, Mr Liu Shan, from re-entering the industry for eight months from 2 April 2026 to 1 December 2026. The SFC found that between January 2016 and March 2021 Liu and another staff member engaged in personal trading contrary to regulatory requirements while responsible for investment decisions for funds managed by Impression. Liu carried out over 2,500 personal transactions without prior written approval, traded the same securities on the same day as the fund he managed over 200 times, participated in 12 initial public offerings through personal accounts subscribing for the same IPO shares as the fund, and failed to hold personal investments for at least 30 days on 29 occasions. The SFC considered these activities breaches of the Fund Manager Code of Conduct and Impression’s staff dealing policies, and noted failures to identify and manage actual or potential conflicts of interest; although Impression had written policies, they were not implemented or enforced before 2021 and procedures to detect irregularities were ineffective, with the firm’s failures attributed to Liu’s neglect in his senior management and responsible officer roles. In setting sanctions, the SFC noted that the control failures enabled staff to trade alongside managed funds, potentially at more favourable prices, and cited the risk to investor trust and market confidence. It also took into account Impression’s introduction of regular post-trade monitoring from 2021, the absence of evidence that the personal trades were intended to benefit staff at the funds’ expense, and the cooperation of Impression and Liu.

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