MyComplianceOffice Blog

Personal Account Dealing, when employees gain personal profit from inside information or other data that they became aware of in their professional capacity, is an area of inherent risk for any firm in the financial services sector. 

Every single firm, no matter how big or small, has to adhere to all the latest regulations, requirements and laws. However, many small-sized firms struggle with meeting their compliance obligations, as they lack sufficient resources to properly manage this area.

The Hong Kong Securities regulator - The Securities and Futures Commission (SFC) has suspended the licence of a former licensed representative of Mason Securities Limited (MSL), previously known as GuocoCapital Limited, for misconduct, for 12 months from 28 October 2020 for failing to obtain approval to maintain a securities trading account with an external brokerage, and trading on that account without permission, approval and therefore breaching Mason Securities Personal Account Dealing policy. You can read more on that here.

The FCA have been highlighting that firms are failing to implement various recommendations in their PAD policies and controls to meet regulatory requirements and avoid market abuse. In order to prevent personal account dealing, firms should ensure preparation for the FCA’s requirements.

The Financial Conduct Authority (FCA) issued Market Watch 62 in October in which the regulator shared its concerns about personal account dealing (PAD), or rather when employees of an authorized firm trade for themselves rather than clients.