Senior Management Accountability: MLRO fined $400,000 by the SFC for failure to discharge senior management duties

The Securities and Futures Commission (the “SFC”) recently publicly reprimanded and imposed a fine in the sum of HK$400,000 on a Money Laundering Reporting Officer (“MLRO”) / Compliance Officer of a SFC licenced firm for his failure to discharge his duties as a member of the firm’s senior management, including failures to conduct adequate enquiries before approving unusual or suspicious third party fund transfers, to maintain proper records of enquiries, to ensure proper and adequate systems were in place to mitigate money laundering risks, etc.

In this case, the MLRO is not a licensed person under the Securities and Futures Ordinance (“SFO”), but comes within the definition of a “regulated person” under section 194(7) of the SFO for being a person involved in the management of the business of a licensed corporation.

This case serves as a reminder that the SFC continues to focus on anti-money laundering in its supervision and enforcement work, and will exercise its disciplinary powers against members of senior management of a licenced firm irrespective of whether they are licensed or registered with the SFC.

For more information, please refer to the SFC’s website at LINK.

7 July 2021
Practice Area(s):
Key Contact(s):