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HK regulator fines, reprimands Morgan Stanley over internal control failures
[HONG KONG] Hong Kong's securities regulator said it fined and reprimanded the local securities unit of Morgan Stanley for internal control failures related to disclosure of short selling orders and comprehensive documentation of electronic trading services.
Morgan Stanley Hong Kong Securities Ltd was fined HK$18.5 million (S$3.2 million) related to failures that took place between 2013 and 2016, the Securities and Futures Commission (SFC) said in an e-mailed statement on Wednesday.
The breaches of Hong Kong's code of conduct included failure to avoid "conflicts of interest between principal and agency trading" and to comply with certain disclosures in short selling orders, as well as to properly document its electronic trading systems, the SFC said.
Morgan Stanley has agreed to hire an outside firm to review its internal controls, the SFC added. The US firm didn't immediately reply to a Reuters request for comment.