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B. G., Opalesque Geneva:

The Hong Kong Securities and Futures Commission (SFC) has reprimanded and fined KTF Capital Management Limited (KTFCM) HK$400,000 (US$51,000) for failures to comply with the Securities and Futures (Financial Resources) Rules (FRR), a liquidity regime.

The SFC found that KTFCM failed to maintain its required liquid capital of approximately HK$2.8m between 13 and 18 December 2018 and notify the SFC when it became aware of its inability to comply with the financial resources requirements.

On 13 December 2018, KTFCM subscribed, on a proprietary trading basis, for the shares of Fosun Tourism Group upon its IPO on Hong Kong's Stock Exchange. The subscription was financed by a loan and gave rise to a liquid capital deficit. After the subscription was completed, KTFCM entered into an assignment agreement in relation to the Shares and the Loan and backdated its execution date in an attempt to retrospectively prevent the liquid capital deficit from arising.

It transpired that the almost $20m deficit in KTFCM's liquid capital was the result of an oversight in that it failed to anticipate its trading in shares would trigger adverse implications to its liquid capital calculation under the FRR.

Established in 2010, ......................

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