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Hong Kong’s Market Monitoring Committee has begun a review of eight brokerage to investigate their marginal financial practices after seeing heavy overworks for some initial public offers (IPOs).
Chief Executive Officer Julia Liung Funk-Yi said on Friday that the Bonds and the Future Authority (SFC) had been closely monitoring whether these brokers were careful about the risk management of the new stocks. Margin financing refers to loans that brokerage provides customers to buy shares.
“We will examine the principles of securities – even if they are sounds, we will fully consider the customer’s repayment and set the relevant credit limitations to prevent excessive funds,” he said.
The SFC does not name the tracked brokers.
In November 2023, the SFC sent a circular to licensed companies to manage the IPO subscription services and manage their risks when funding and funded following changes introduced by the fast interface for the new release (FINI) site.
Instead of locking the funds for a full excess, Fini operating system allows brokers to pay only the maximum number of shares that can be assigned to public offerings. Some brokers offer zero interest margin financial loans to attract customers.
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