On April 09, 2026, the SFC fined Impression Investment Limited $2 million and banned former RO Mr Liu Shan for eight months due to regulatory breaches regarding staff trading activities between 2016 and 2021.
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SPOTLIGHT ON
FAMILY OFFICES
On April 09, 2026, the Securities and Futures Commission ("SFC") has reprimanded and fined Impression Investment Limited (Impression) $2 million for failing to diligently supervise its staff and maintain effective internal controls over staff trading activities. The SFC has also prohibited Mr Liu Shan, a former director, responsible officer ("RO") and manager-in-charge of Impression, from re-entering the industry for eight months from 2 April 2026 to 1 December 2026.
Nature of Personal Trading Violations. The SFC’s investigation found that between January 2016 and March 2021, Liu and another staff member engaged in personal trading in a manner contrary to regulatory requirements when they were responsible for making investment decisions for funds managed by their employer. Notably, Liu conducted over 2,500 personal transactions without obtaining prior written approval, traded in the same securities on the same day as the fund he managed over 200 times, participated in 12 initial public offerings ("IPO") through his personal accounts, and failed to hold his personal investments for at least 30 days on 29 occasions.
Compliance and Control Failures. The SFC was of the view that these personal trading activities breached both the Fund Manager Code of Conduct and Impression’s staff dealing policies. The actions of Liu and the other staff member also demonstrate their failure to identify, prevent or manage actual or potential conflicts of interest arising from these trading activities. The SFC found that Impression failed to diligently supervise its staff to ensure compliance with its staff dealing policies and other applicable regulatory requirements, as written policies were neither implemented nor enforced prior to 2021.
Sanction Considerations. In deciding the sanction, the SFC has taken into account all relevant circumstances, including that Impression’s failures enabled its staff to conduct personal trades in the same stock on the same day as the funds they managed and at more favourable prices, which could undermine investor trust. However, mitigating factors included that Impression has implemented regular post-trade monitoring of staff personal trades since 2021, there is no evidence that the personal trades were intended to benefit themselves at the expense of the relevant funds, and Impression and Liu’s cooperation with the SFC.
Background and Licensing Details. Impression is licensed under the Securities and Futures Ordinance to carry on Type 9 (asset management) regulated activity. Liu was accredited to Impression and approved to act as its RO from 30 April 2014 to 15 February 2024 and is currently not licensed by the SFC. Liu served as a director of Impression from 21 May 2013 to 29 February 2024 and was Impression’s manager-in-charge of core functions including Overall Management Oversight, Compliance and Anti-money Laundering, and Finance and Accounting. Please refer to the Statement of Disciplinary Action for the relevant regulatory requirements.
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