Dear Mr. Schneider,
We refer to your e-mail of 21 August 2000 in which it appears to us that you
would like to lodge a complaint with the SFC. In this regard, we like to take
this opportunity to explain the SFC's procedures, powers and limitations in
handling an investor's complaint.
What you should report to the SFC?
Legislation and the SFC codes of practice prohibit a range of market misconduct,
including:
1. Unregistered activities (i.e. trading or advising without holding an SFC
licence).
2. Misconduct by licensed dealers, investment advisers, leveraged forex traders
or their representatives. Such misconduct may include unauthorised trading,
misrepresentations or fraud.
3. Market manipulation and insider dealing.
4. Sales of 'unauthorised' investment funds or other investment arrangements to
the general investing public. All investment products for sale in Hong Kong have
to be pre-approved and authorised by the SFC.
The public are also invited to report any suspicious activity they come across,
whether it be identified in advertisements, web sites, chat rooms or bulletin
boards, pertaining to the securities and futures market in Hong Kong.
What to include in your report?
You can lodge your complaint by completing the complaint form in our web-site
(www.hksfc.org.hk) or e-mailing the SFC on investor.info@hksfc.org.hk.
Alternatively, you can set out your complaint in writing, which can be posted or
faxed to us.
Your report should include:
1. The name of the person or company you suspect of wrongdoing, and in the case
of an individual, the name of the organisation for which he works.
2. Full details of the events, dates and places in chronological order.
3. Any relevant documentary material which may support your complaint, such as
client agreements, contract notes, receipts, statements of account, or
correspondence.
4. The names of any person who may have witnessed or have information concerning
the suspected misconduct or activity.
5. The names of any other organisation you may have approached, e.g. the Stock
or Futures Exchanges, the Police, the Consumer Council, ICAC.
6. Your name, address and telephone number, so that we can contact you.
How the SFC will assess and respond to your complaint?
The SFC makes every effort to evaluate promptly and thoroughly the information
supplied in a complaint, though it can give no assurance that every complaint
will result in an investigation, or if it does, that the investigation will
result in immediate action. All reports will be treated with the utmost
confidence. However, as a complainant, you should be prepared to act as a
witness to support your allegations.
The SFC will send a preliminary response to any complaint within two weeks,
advising whether the complaint can be processed any further, e.g. if it falls
within the SFC's jurisdiction, or if we need to ask for additional information.
What the SFC cannot deal with?
The role of the SFC is to investigate and, if necessary, take action against a
licensed person or company for improper trading, in order to prevent and deter
similar occurrences in the future. The SFC has successfully exposed many abuses
within the industry and punished the individuals concerned; many of these
successes have stemmed from complaints from the public, which is why we
encourage such reports.
There are, however, certain limitations on the SFC's ability to respond to
investors' requests for assistance with their complaints:
1. There are matters which are outside our jurisdiction, and others that may be
within our jurisdiction but which show little or no prospect of successful
enforcement action.
2. The SFC does not have the legal right or obligation to arbitrate or intercede
in civil disputes between investors and intermediaries. Neither can the SFC
make an order for compensation or damages. An enforcement action by the SFC will
not usually result in any monetary award to a private party, and is not a
substitute for civil action for damages. Investors who are looking for financial
redress should seek professional legal advice on the remedies available.
3. It is inappropriate for the SFC to make judgement on issues such as service
quality, the correctness of the views or commercial decisions of our licensees,
or contractual rights of the parties concerned.
Please also understand that it is not always possible to tell a complainant what
we may have discovered, since the SFC is restrained by law from disclosing
certain information, particularly with regard to on-going investigations and
enforcement matters, and their results.
Yours sincerely,
Sharon Li
Assistant Manager
Investor Education and Communications
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