TWO former senior employees of UOB Kay Hian Private Limited (UOBKH) were charged on Wednesday for allegedly lying to the Monetary Authority of Singapore (MAS) in relation to reports on a then Catalist aspirant. Lan Kang Ming, 38, and Wee Toon Lee, 34, each face three charges of providing MAS with false information in October 2018 in relation to due diligence reports on an unidentified company applying to list on the Catalist board of the Singapore Exchange. MAS said in a media statement on Wednesday that it was performing an onsite inspection of UOBKH between June and August 2018, to assess the latter's controls, policies and procedures in relation to its role as an issue manager for Initial Public Offering (IPOs). During the examination, Lan and Wee were said to have provided different versions of a due diligence report relating to background checks on a company applying to be listed on the Catalist board of the Singapore Exchange. UOBKH had acted as the issue manager
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Daniel Ren in Shanghai and Reuters in Beijing
17 January 2015
China’s securities regulator deals heavy blow to three major brokerages as they are banned them from opening new margin trading accounts for three months.
The mainland’s securities regulator dealt a heavy blow to three major brokerages yesterday, just one month after a nationwide probe, as it banned them from opening new margin trading accounts for three months.
Citic Securities, Haitong Securities and Guotai Junan Securities, among the most powerful brokerages in the country, were found to have illegally rolled over margin trading contracts for a large number of investors, the China Securities Regulatory Commission said.
CSRC spokesman Deng Ge said the three brokerages had been punished for their wrongdoings but they still failed to correct their mistakes.
The punishment reflected the regulator’s determination to effectively police margin trading and short selling businesses following a strong market rally that began in September last year.
Margin trading, which allows investors to borrow cash from brokerages to buy shares, has soared since the second half of last year, with millions of investors betting on further gains on the stock market.
On the Shanghai Stock Exchange alone, outstanding borrowing for margin trading has reached 767 billion yuan (HK$960.5 billion), more than double the 284 billion yuan at the end of July, according to data released by the bourse.
The CSRC, concerned about a possible boom-bust cycle, late last year warned investors not to chase irrational rallies. It also launched investigations into the margin trading businesses of 45 brokerages between December 15 and 28.
Officials at Haitong Securities declined to comment. Citic Securities and Guotai Junan Securities could not be reached for comment.
According to brokers, most securities firms have run out of cash for margin trading because of the buying euphoria that has gripped the share market.
Investors borrowing for margin trading are charged an annual interest of 8.6 per cent.
“Big brokerages with strong capital bases would be able to lend more,” said Howhow Zhang, the research head of fund consultancy Z-Ben Advisors. “It was not a surprise that the three major brokerages were found to have violated rules.”
Mainland brokerages, in order to vie for a bigger share of margin trading businesses, are stepping up efforts to raise fresh funds.
Citic and Haitong both announced refinancing plans to raise fresh capital on the Hong Kong stock exchange while Guotai Junan is awaiting approval for an initial public offering on the mainland.
“There had been a guessing game on the level of tolerance by the regulator on margin trading,” said Pan Hongwen, an analyst at UBS. “The regulator obviously wants to see the index rise at an orderly pace.
“Therefore, it would take a harsh stance on margin trading to prevent a hefty increase of the market.”
The mainland’s insurance regulator also investigated insurers’ margin trading businesses recently.
It is believed that the probes were carried out following directives from the state leadership.
Warnings had been issued to China Merchants Securities, GF Securities and other brokerages, Deng said.
The Shanghai market closed 1.2 cent higher yesterday.