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Hong Kong SFC Fines CISI Asset Management Unit Over Fund Management Failures

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The Securities and Futures Commission reprimanded and fined China Industrial Securities International Financial's (HKG:6058) asset management unit HK$6.8 million for failures in managing a private fund between August 2019 and September 2020, according to a Monday press release.

The regulator found China Industrial Securities International Asset Management (CISIAM) failed to properly identify and address red flags in a series of investment arrangements, exercise independent investment discretion and conduct adequate due diligence.

The SFC also found CISIAM failed to ensure the fund's investments complied with its stated investment restrictions and objectives.

It also did not implement effective measures to identify, manage and monitor the fund's risks.

In deciding the penalty, the SFC noted the firm's failures could have facilitated misconduct or other improper activities.

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