Circularisation exercise and internal control review

The Securities and Futures Commission (SFC) will conduct a circularisation exercise on clients’ accounts of selected securities brokers in February 2024, focusing on client asset protection.

The SFC prioritizes client asset protection in supervising licensed corporations (LCs), and conducts regular circularisation exercises to obtain confirmations from clients and identify potential misconduct. The review will cover brokers’ internal control systems designed to protect client assets, such as information maintenance, money and securities reconciliation, and distribution of account statements and trade documents. The review will also assess compliance with regulatory standards set out in previous SFC circulars.

Resource:

https://apps.sfc.hk/edistributionWeb/gateway/EN/circular/intermediaries/supervision/doc?refNo=24EC5

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