Budapest Post

Cum Deo pro Patria et Libertate
Budapest, Europe and world news

Fidelity Asset manager conducted $40bn in futures trades over 11 years without right licence

Fidelity Asset manager conducted $40bn in futures trades over 11 years without right licence

Hong Kong’s financial regulator has rebuked Fidelity for conducting about $40bn in futures trades over 11 years without the right licence and for not reporting the breach to authorities quickly enough.
The city’s Securities and Futures Commission fined the US asset manager HK$3.5m ($450,000), pointing out that the misconduct was not deliberate, and adding that clients did not lose money as a result of the failure.

The SFC said that between August 2007 and July 2018 Fidelity dealt in futures contracts without a “Type 2 licence”, relying on certain exemptions.

Fidelity, which manages about $2.5tn worldwide, then found out when it conducted a licensing review in May 2018 that there were incidences where the trades did not qualify for exemptions.

The Type 2 licence is used for dealing in futures contracts, oversees trading or broking and buying and selling contracts for clients.

The asset manager did not report the incident — which involved 6,738 trades for affiliated entities worth $39.7bn — to the SFC until August later that year, “after it had obtained external legal advice on the matter”, according to the regulator.

These sorts of incidents must be reported immediately on discovery, the SFC said. The regulator also criticised Fidelity over paperwork mistakes the fund made in 2017.

“The SFC is of the view that [Fidelity] failed to . . . put in place satisfactory and effective systems and controls to ensure the accuracy of information submitted to the SFC,” the regulator said.

The company’s management said in a statement that it was “disappointed” by the incident and felt “regret” that it took place.

“We reported the licence issue to the SFC and we have co-operated fully with them during their investigation. We have taken all steps necessary to improve our internal controls,” the statement said.

The SFC has previously come down hard on international investment banks over due diligence failings.

This year the regulator hit UBS, Morgan Stanley, Bank of America Merrill Lynch and Standard Chartered with fines worth a total of about HK$786.7m, and blocked UBS from sponsoring initial public offerings for a year.

The SFC’s decision was influenced by the fact that Fidelity approached them, no investors lost money and that the trades were not viewed as fraudulent.

The regulator said it took into account that the company had engaged an independent reviewer to look at its internal controls, that it co-operated with the regulator and that it had “an otherwise clean disciplinary record with the SFC”.

In 2012, a former fund manager at Fidelity in the US was banned from trading in Hong Kong for two years, and in 2011 the SFC criticised Fidelity over breaches of the takeovers code.
AI Disclaimer: An advanced artificial intelligence (AI) system generated the content of this page on its own. This innovative technology conducts extensive research from a variety of reliable sources, performs rigorous fact-checking and verification, cleans up and balances biased or manipulated content, and presents a minimal factual summary that is just enough yet essential for you to function as an informed and educated citizen. Please keep in mind, however, that this system is an evolving technology, and as a result, the article may contain accidental inaccuracies or errors. We urge you to help us improve our site by reporting any inaccuracies you find using the "Contact Us" link at the bottom of this page. Your helpful feedback helps us improve our system and deliver more precise content. When you find an article of interest here, please look for the full and extensive coverage of this topic in traditional news sources, as they are written by professional journalists that we try to support, not replace. We appreciate your understanding and assistance.
Newsletter

Related Articles

0:00
0:00
Close
Emails Leaked: How Passenger Luggage Became a Side Income for Airport Workers
Polish MEP: “Dear Leftists - China is laughing at you, Russia is laughing, India is laughing”
Western Europe Records Hottest June on Record
BRICS Expands Membership with Indonesia and Ten New Partner Countries
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
China’s Central Bank Consults European Peers on Low-Rate Strategies
France Requests Airlines to Cut Flights at Paris Airports Amid Planned Air Traffic Controller Strike
Poland Implements Border Checks Amid Growing Migration Tensions
Emirates Airline Expands Market Share with New $20 Million Campaign
Amazon Reaches Milestone with Deployment of One Millionth Robot
Yulia Putintseva Calls for Spectator Ejection at Wimbledon Over Safety Concerns
House Oversight Committee Subpoenas Former Jill Biden Aide Amid Investigation into Alleged Concealment of President Biden's Cognitive Health
Amazon Reaches Major Automation Milestone with Over One Million Robots
Extreme Heat Wave Sweeps Across Europe, Hitting Record Temperatures
Meta Announces Formation of Ambitious AI Unit, Meta Superintelligence Labs
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Germany Votes to Suspend Family Reunification for Asylum Seekers
Budapest Pride Parade Draws 200,000 Participants Amid Government Ban
Southern Europe Experiences Extreme Heat
Xiaomi's YU7 SUV Launch Garners Record Pre-Orders Amid Market Challenges
Jeff Bezos and Lauren Sanchez's Lavish Wedding in Venice
Russia Launches Largest Air Assault on Ukraine Since Invasion
Massive Anti-Government Protests Erupt in Belgrade
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Hungary's Prime Minister Criticizes NATO's Role in Ukraine
EU TO HUNGARY: LET THEM PRIDE OR PREP FOR SHADE. ORBÁN TO EU: STAY IN YOUR LANE AND FIX YOUR OWN MESS.
Hungarian Scientist to Conduct 30 Research Experiments on the International Space Station
NATO Members Agree to 5% Defense Spending Target by 2035
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
International Astronaut Team Launched to Space Station
Macron and Merz: Europe must arm itself in an unstable world
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Iran Intensifies Crackdown on Alleged Mossad Operatives After Sabotage Claims
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
Oil Prices Set to Surge After US Strikes Iran
BA and Singapore Airlines Cancel Dubai Flights Amid Middle East Tensions
Trump Faces Backlash from MAGA Base Over Iran Strikes
Meta Bets $14 B on Alexandr Wang to Drive AI Ambitions
FedEx Founder Fred Smith, ‘Heart and Soul’ of the Company, Dies at 80
Chinese Factories Shift Away from U.S. Amid Trump‑Era Tariffs
Pimco Seizes Opportunity in Japan’s Dislocated Bond Market
Labubu Doll Drives Pop Mart to Status as China’s Most Valuable Toy Maker
Global Coal Demand Defies Paris Accord Goals
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Telegram Founder: I Will Leave My Fortune to Over 100 of My Children
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
×