• HK SFC reprimanded and also fined Profitech HKD 3.99mn for regulatory breaches.

Key Breaches

• Failed to maintain liquid capital of HKD 3mn between February - June 2021, since July 2022.
• Improperly repledged client securities collateral without valid client standing authority.
• Failed to ensure market value of repledged collateral did not exceed repledging limit.
• Provided HKD 15.6mn financial accommodation to 2 new clients using borrowed funds.
• Failed to punctually notify SFC of change in holding company's shareholding structure.
• Above breached Securities and futures ordinance, Securities and futures (licensing and registration) (information) rules, and Securities and futures (client securities) rules.

Other Relevant Circumstances

• Repeated and prolonged failures to maintain required liquid capital; the gravity of improper repledge of client securities; failure to rectify irregularities despite reminders.
• Profitech's cooperation in resolving SFC's concerns and agreement to engage an independent reviewer for internal controls review, otherwise clean disciplinary record.