Financial Crime

Fighting against financial crime is one of the key agenda of financial regulatory bodies. SFC has also mentioned this objective in the SFO. But how many resources have they put on financial crime issues? What is the effectiveness? Investigation into financial crime requires the intelligence expertise, where regulators with only accounting or legal background may not be competent enough to discharge this duty.

Recently John Tiner, UK FSA's Chief Executive, spoke in a conference that FSA will set up a new Financial Crime and Intelligence Division. This creates a recognised centre of excellence to bring together intelligence expertise needed to meet the increased challenges ahead and maintain the integrity of UK's Financial Sector.

The major types of financial crime prevailing in the financial markets include:

• Fraud
• Market abuse
• Money laundering & terrorist financing

Fraudsters are mainly identity theives playing the hi-tech games such as fake websites, phishing emails, etc. The tricks are not only limited to stealing money but also misappropriating the client accounts for market abuse. For money laundering, the criminals will also "cross over" different financial sectors (e.g. both banking and securities industries).

In HK, financial crimes are handled in a fragmented approach. There is not a single body coordinating the efforts of different enforcement units. The HK government may consider the idea of setting up a body like the Financial Crime and Intelligence Division.