The Securities and Futures Commission (SFC) has revoked the licence of Ernest Chan Tsz Kin and banned him from the securities industry for 10 years, effective immediately through August 2036. The disciplinary action follows an SFC investigation that found Chan, a former responsible officer at Keptain Securities and Asset Management Limited, engaged in systematic window dressing of the firm’s financial resources between June 2016 and March 2018.
- Violation Period: June 2016 to March 2018
- False Financial Returns: 15 submissions to SFC containing dishonoured cheques
- Liquid Capital Deficits: Ranged from $731,000 to $3,473,000 over 20 months
- Required Minimum: $3 million in liquid capital
- Ban Duration: August 24, 2026 to August 23, 2036
During the investigation period, Keptain included amounts from 15 cheques issued by Chan or connected entities in its liquid capital calculations. While deposited near month-end, these cheques were subsequently dishonoured within days, before financial returns were submitted to the SFC. Excluding these amounts would have revealed Keptain’s failure to meet the required $3 million minimum liquid capital threshold in every reporting month. Additionally, Keptain failed to notify the SFC of its persistent deficits as mandated under the Securities and Futures Ordinance and Financial Resources Rules.
The SFC determined that Chan’s conduct was intentional and demonstrated misconduct that questions his fitness and propriety to hold a licence. The regulator emphasised that the Financial Resources Rules represent critical statutory safeguards for market investors, and that Keptain’s window dressing amounted to flouting this regime and preventing proper assessment of financial soundness. The SFC noted that Keptain conducted no regulated activities during the relevant period and credited Chan’s cooperation in resolving the concerns.
Keptain (formerly Frontier Global Asset Management Limited) has applied for voluntary revocation of its licence. Chan was previously approved as a responsible officer for Type 1 (dealing in securities), Type 4 (advising on securities), and Type 9 (asset management) activities. He was accredited to CIS Securities Asset Management Limited as a responsible officer for the same activity types as of July 2023.
