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By: Vivian Tang, Michael Wong, Dechert
The Hong Kong Securities and Futures Commission (SFC) has announced that it reprimanded and fined a Hong Kong private equity firm, SEAVI Advent Ocean Private Equity Limited (PE Firm), for employing or appointing unlicensed persons to perform regulated functions for its asset management business. This disciplinary action, following the SFC's recent confirmation to exclude private offshore companies from the private securities exemption, may signify the beginning of a trend towards enforcement by the SFC against private equity managers.
Disciplinary Action
As background, according to the Statement of Disciplinary Action issued by the SFC in June 2013, the PE Firm was appointed as a fund manager of a private investment fund, and within a year 23 investors had subscribed for non-voting participating shares in the fund with a total capital commitment of HK$60 million.
The SFC found that one director of the PE Firm, as well as an individual investment manager of the PE Firm, had engaged in the following regulated activities without having a license: (a) marketing the fund to potential investors; (b) answering investors' queries regarding (among other matters) calculation of the fund's subscription and management fees; and (c) arranging for the execution of the fund's know-your-client questionnaires and subscription agreements.
In addition, the SFC found that the director had "introduced" 11 investors to invest US$8.75...................... To view our full article Click here
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