meta_id 3355735

On July 27, 2026, the Securities and Futures Commission (SFC) reprimanded and fined Bright Smart Securities International (H.K.) Limited (BSSIHK) HK$2.8 million for failing to implement adequate and effective internal control procedures to monitor and detect wash trades conducted by its clients. The SFC's investigation revealed that between November 1, 2023 and September 13, 2025, BSSIHK allowed execution of 1,021 pairs of wash trades involving 736 stocks and warrants through 615 clients' accounts due to inadequate internal controls. Prior to March 2024, BSSIHK relied primarily on post-trade monitoring and manual review to identify suspicious trading activities, enabling clients to conduct wash trades before detection. Although BSSIHK introduced a pre-trade interception arrangement in March 2024, the controls remained inadequate because the arrangement depended on manual intervention rather than automated controls. The manual-driven intervention to block trades was triggered only after a second instance of wash trading was detected. Additionally, multiple wash trades in the same client account within a single day were counted as a single instance, failing to capture repeated misconduct within the same trading day and allowing clients to execute multiple pairs of wash trades on a single day without restriction. The SFC determined that BSSIHK's failure to maintain adequate and effective internal control procedures breached the Code of Conduct and was contrary to the best interests of market integrity. In deciding the disciplinary sanction, the SFC considered that BSSIHK had previously been reminded to strengthen its relevant internal control systems and similar deficiencies were repeatedly identified in the firm's operations, yet it failed to fully rectify the deficiencies in each instance. BSSIHK has undertaken to enhance its systems and controls and engage an independent reviewer to verify the effectiveness of the enhanced measures. BSSIHK is licensed to carry on Type 1 (dealing in securities), Type 4 (advising on securities) and Type 7 (providing automated trading services) regulated activities.