The decision follows an SFC investigation which found that SHKIS failed to perform a number of duties before selling HK$10.5m (£940,000, €833,000) of the equity-linked notes to 10 clients between May and August 2008.
This included failing to perform adequate due diligence on the notes prior to selling them to clients and not providing enough training for sales staff to enable them to understand the products their risks and relevant suitability criteria. The SFC also said SHKIS failed to disclose material information, including the product terms and conditions and the risks associated with the equity-linked notes to its clients.
The SFC said it wanted to send a strong message to the market to show that failures to ensure suitability of investment products and disclosure of material information to clients were not acceptable and would not be tolerated.
In October 2009, the SFC fined SHKIS HK$4m for internal control failures that it said contributed to market misconduct.
Following an inquiry into dealing in the shares of QPL International Holdings Ltd in 2003, the Market Misconduct Tribunal found in January 2009 that Edmond Chau Chin Hung, a former responsible officer of SHKIS, and Connie Cheung Sau Lin, a former account executive of SHKIS, had engaged in false trading and price rigging, contrary to the Securities and Futures Ordinance, for the period from 6 May to 10 June 2003.
SHKIS remains licensed under the Securities and Futures Ordinance to carry on business in Type 1, dealing in securities and Type 4, advertising securities regulated activities.
