HONG KONG, Dec 30 (Reuters) - Hong Kong’s market watchdog fined a local unit of Fidelity HK$3.5 million ($450,000) for trading nearly $40 billion of futures contracts without an appropriate licence.
The trades took place from 2007 to 2018, and while the asset manager identified the incident itself, it did not report it to the regulator for two months, rather than immediately as required.
The unit, FIL Investment Management (Hong Kong), has multiple other licences from the Securities and Futures Commission (SFC), but it did not, at that time, have a licence to deal in futures contracts, and relied on exemptions to carry out the activity.
Fidelity later realised that some 6,738 trades in futures contracts, with an aggregate transaction value of about $39.7 billion were not covered by the exemption.
“We have taken all steps necessary to improve our internal controls,” said a Fidelity spokeswoman, adding that the company regretted that the incident took place. ($1 = 7.7865 Hong Kong dollars) (Reporting by Alun John; Editing by David Evans)