The Hong Kong Securities and Futures Commission (SFC) has reprimanded and fined Saxo Capital Markets HK Limited (SCMHK) HKD 4 million for regulatory breaches in distributing SFC-unauthorised virtual asset (VA) funds and other VA-related products via its online trading platform, including allowing retail clients to trade products that, under applicable SFC guidance at the time, should have been offered only to professional investors. Between 1 November 2018 and 25 November 2022, SCMHK executed 1,446 transactions in 32 complex VA products for 130 retail clients and six individual professional investors, including 21 exchange-traded derivative VA products. The SFC found SCMHK did not assess clients’ knowledge of VA investing before effecting transactions, nor provide sufficient VA-specific information and warning statements, and lacked specific VA product due diligence procedures, relying instead on group protocols that failed to identify the products’ VA exposure. The firm also failed to implement adequate policies and controls to supervise the platform and ensure suitability and adequate disclosure for complex VA products, including inadequate enquiries into derivatives knowledge for 87 clients who traded the exchange-traded derivative VA products. The failures were found to breach the Guidelines on Online Distribution and Advisory Platforms and the SFC Code of Conduct. In setting the sanction, the SFC took into account that the misconduct persisted for over four years, was self-reported, and was followed by remedial steps including voluntary client compensation for losses, as well as SCMHK’s cooperation and acceptance of the findings and its otherwise clean record. SCMHK has ceased carrying on regulated activities since 28 February 2025.

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