On February 9, 2026, the Securities and Futures Commission ("SFC") fined Kylin International ("HK") Co., Limited $9 million for multiple failures in managing private funds over three years, including failing to disclose conflicts of interest, conduct regular audits, implement proper controls, and comply with AML/CTF regulations.
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On February 9, 2026, the Securities and Futures Commission ("SFC") imposed a $9 million fine and reprimand upon Kylin International ("HK") Co., Limited (Kylin) for regulatory failures related to private funds management over a three-year period.
The SFC found multiple instances of non-compliance by Kylin, which acted as an investment manager or consultant for six sub-funds of a Cayman-incorporated fund from August 2018 to July 2021.
Key failures include: non-disclosure of conflicts of interest from loans extended to the sub-funds, failure to perform monthly reconciliations and valuations, lack of independent audits, inadequate Know Your Client ("KYC") and suitability assessments, non-compliance with Anti-Money Laundering and Counter-Terrorism Financing ("AML/CTF") regulations, and misrepresentation of regulatory obligations to investors.
Senior management, including Mr. Steven Wong Yung and Ms. Zhu Hong, were held accountable for these failures, which led to Kylin’s misconduct.
Factors considered by the SFC in imposing sanctions include the potential to undermine public confidence, market integrity, the need to send a strong deterrent message, Kylin's remedial measures post-limited review, cessation of regulated activities, and Kylin's clean disciplinary record.
Kylin’s license was revoked on January 22, 2025, after ceasing regulated activities on December 31, 2023.
The SFC’s circular to licensed corporations engaged in asset management business, issued on October 9, 2024, highlights similar misconduct and outlines stricter disciplinary actions and penalties for future incidents.
Disciplinary actions against Wong and Zhu are detailed in the SFC’s press releases dated March 19, 2025, and August 18, 2025, respectively.
The Statement of Disciplinary Action is available on the SFC's website, last updated on February 9, 2026.
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