In its Quarterly Report for October to December 2009 [released today], the Securities and Futures Commission (SFC) notes the conclusion of its investigations into the sale of Lehman Brothers Minibonds following the repurchase agreement reached with the last of the 19 distributors.
The report also describes non-Minibonds agreements reached with two banks to repurchase Lehman Equity Index-linked Principal Protected Notes at 80% of the principal investment from over 500 customers who had bought such notes on or after 5 August 2008.
Other enforcement actions are also highlighted including jail terms of 26 to 30 months for four individuals who conspired to manipulate the share price of Asia Standard Hotel Group. This was the largest market manipulation case locally to date and the first indictable prosecution for this kind of offence under the Securities and Futures Ordinance (SFO).
During the reporting period, the SFC began consultation on proposals to transfer the regulation of public offers of structured products from the Companies Ordinance to the SFO as a technical sequel to the earlier consultation proposals to enhance investor protection. A joint-consultation on a proposed operational model for a scripless securities market was also issued.
The report also notes the signing of a declaration with the Securities Commission of Malaysia to provide mutual recognition of Islamic collective investment schemes as part of the SFC’s efforts to support the development of Islamic finance in Hong Kong.
The SFC’s mass-media and interactive investor education initiatives continued with high levels of activity. A plain-language booklet, The SFC Guide, was published to help the public better understand the SFC’s role in the overall financial regulatory structure. Activities designed to reach a wider segment of the investing public were also increased including a new initiative to partner with community organizations in delivering investor education seminars.