The Hong Kong Securities and Futures Commission has reprimanded and fined Interactive Brokers Hong Kong Limited (IBHK) HKD 4.2 million for regulatory breaches relating to the handling of client assets, after the firm loaned clients’ securities based on expired standing authorities. Between 3 December 2017 and 23 October 2020, IBHK relied on expired standing authority for 7,911 clients and loaned their Stock Exchange of Hong Kong Limited-listed securities under a securities borrowing and lending agreement. The lapse arose because a programming error meant the firm did not send renewal notices for the standing authorities during the period. The conduct breached the Securities and Futures (Client Securities) Rules and the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission. In setting the sanction, the SFC took into account IBHK’s remedial actions and self-reporting, the absence of evidence of client loss and lack of deliberate misconduct, and the firm’s cooperation and acceptance of the SFC’s findings and disciplinary action.
Hong Kong Securities & Futures Commission 2025-04-28
Hong Kong Securities and Futures Commission reprimands and fines Interactive Brokers Hong Kong Limited HKD 4.2 million for client asset rule breaches
The Hong Kong Securities and Futures Commission fined Interactive Brokers Hong Kong Limited HKD 4.2 million for mishandling client assets due to expired standing authorities. The breaches, affecting 7,911 clients, occurred between December 2017 and October 2020 and were attributed to a programming error. The sanction considered the firm's remedial actions, self-reporting, and cooperation, with no evidence of client loss or deliberate misconduct.