Last week SFC suspended the licence of a futures dealer (Tsoi Bun) for 15 months due to manipulation of the futures market. This is a rare case because usually people are caught by SFC for manipulation of the stock market.
In Jun 2000, HKFE introduced the pre-market opening period (30 minutes before the normal trading hours) as a price discovery mechanism. An indicative calculated opening price (COP) is calculated every time an order is placed, changed or cancelled. Orders are received, ranked and ultimately matched at the last indicative COP.
During the pre-market opening periods of 2 trading days in 2002, Tsoi artificially increased the COP of the HSI futures contracts by 160 points and 76 points respectively, and made a profit of $510,000 through his net short positions.
When Tsoi committed such market manipulation, the SFO was not yet implemented. But even Tsoi had appealed to SFAT, how could SFC take 4 years to conclude this case?
It is not unusual that it takes years for an investigation to have an conclusion. God knows why.
ReplyDeleteLicensed reps and LCs as a result will not be able to change job (because once a rep changes job, the transfer of accreditation will takes years and he will as a result loss his job); or to make an application for e.g. addition of RA (because I believe the SFC will not proceed new application until the old stuff has been cleared).
I have seen real cases that someone lost his job as a result and someone lost the opportunity to get a higher pay job etc.
Should the SFC lay down some kind of governing principles in connection with investigation or enforcement action. This at least will reduce the pressure on licensed persons.