The Hong Kong Securities and Futures Commission fined Saxo Financial 4 million yuan for illegally distributing virtual asset products to retail clients

According to the Hong Kong Securities and Futures Commission (SFC), the SFC has condemned Saxo Financial (Hong Kong) Limited (Saxo) and imposed a fine of HKD 4 million due to Saxo's deficiencies in distributing non-SFC approved virtual asset funds and virtual asset-related products (collectively referred to as virtual asset products) on its online trading platform (online platform). During the period from November 1, 2018, to November 25, 2022 (the relevant period), Saxo allowed retail clients to buy and sell several virtual asset products on the online platform.

According to two circulars issued by the SFC to intermediaries that took effect at critical times, these products should only be sold to professional investors. The SFC's investigation found that during the relevant period, Saxo executed 1,446 transactions on the online platform for six individual professional investors and 130 retail clients, involving 32 virtual asset products. All of the relevant products were classified as complex products, including 21 exchange-traded derivative products (exchange-traded virtual asset products).

Before executing these transactions, Saxo did not assess whether clients had the knowledge to invest in virtual asset products, nor did it provide sufficient information to clients and specifically warn clients about virtual assets, thus failing to comply with the guidelines set out in the two SFC circulars.