The Securities and Futures Commission ("SFC") has banned Mr. Kao Cheng Yung from re-entering the industry for six months, effective from 19 April 2025 to 18 October 2025, following the SFC's sanctions against CSC Futures ("HK") Limited for its failures in AML/CFT compliance between January 2017 and December 2018. The SFC found that CSC's failures were due to Kao's neglect of duties and inadequate risk management systems.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On April 22, 2025, the Securities and Futures Commission ("SFC") prohibited Mr. Kao Cheng Yung from re-entering the industry for a period of six months, effective from April 19, 2025, to October 18, 2025. The prohibition stems from Mr. Kao’s previous role as a responsible officer ("RO"), manager-in-charge of overall management oversight, and managing director of CSC Futures ("HK") Limited ("CSC").
The SFC's investigation found that CSC failed to comply with anti-money laundering and counter-financing of terrorism ("AML/CFT") regulations and other regulatory requirements between January 2017 and December 2018, largely due to Mr. Kao's failure to discharge his duties effectively. This included not properly assessing and managing the risks associated with customer-supplied systems ("CSSs") and failing to detect, assess, and conduct inquiries into client deposits that were disproportionate to their declared financial profiles.
In imposing the six-month ban, the SFC considered the following factors: the dilatory monitoring of client activities and insufficient AML/CFT systems and controls; the need to send a strong message to the market regarding the inacceptability of such failures; and Mr. Kao’s otherwise unblemished disciplinary record. The SFC also noted the significance of CSSs as trading software developed and designated by clients to enable electronic trading. These systems were connected to CSC’s broker-supplied system ("BSS") via an application programming interface ("API").
CSC was previously reprimanded and fined $4.95 million for its failures in AML/CFT compliance. Mr. Kao, who was licensed to carry out various regulated activities under the Securities and Futures Ordinance, was accredited to CSC and approved to act as its RO from September 8, 2017, to July 18, 2021. However, he is no longer licensed by the SFC. The full Statement of Disciplinary Action, which includes the details of this case, is available on the SFC's website and was last updated on April 22, 2025.
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