SFC fines FXCM Asia HK$4 mln for regulatory breaches

SFC fines FXCM Asia HK$4 mln for regulatory breaches

SFC Hong Kong

Hong Kong’s financial regulator, the Securities and Futures Commission (SFC) said it has reprimanded and fined HK$4 million (around US$ 515 000) the forex broker FXCM Asia Limited (the Hong Kong branch of FXCM, now operating as Rakuten Securities Hong Kong Limited) for regulatory breaches in relation to its forex order execution.

An SFC investigation found that between December 2006 and December 2010 HK FXCM and its affiliate kept profits totaling US$1,452,926.69 from favorable price movements in forex trading that occurred between receipt of client orders and execution of orders, while unfavorable price movements were passed on to clients.

The SFC considers that HK FXCM was unfair to its clients and failed to execute their orders at the most favorable available prices. Thus clients were deprived of benefiting from better prices in their trades. Furthermore, HK FXCM lied to its clients that their orders will be executed at the best available prices, when it fact it took the profits for itself.

As part of SFC’s ruling, HK FXCM’s clients who did not benefit because of the company’s order execution practices, will have their accounts credited within 30 days. Those who do not have an account with the broker anymore, will be notified that their former accounts will be temporarily reopened.

According to the SFC, a total of 3,739 accounts of HK FXCM were affected.

The business of HK FXCM was acquired by Rakuten Securities, Inc. in September 2015.  HK FXCM changed its company name to Rakuten Securities Hong Kong Limited in April 2016 and is under new ownership and management.

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