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Document Description
Operational manual and Internal Control Procedure in relation to trading of securities for a financial brokerage.
Objective of the Operations and Internal Control Procedural Manual
The operations manual serves the following objectives:
1) It serves as official company procedures in connection with daily operations to control the activities and safeguard its assets.
2) It serves to satisfy Regulator and relevant requirements.
3) It serves as a control tool to instruct and inform company staff uniformly.
From time to time, the Compliance Division and the Responsible Officer may issue updates or supplements and update to this Manual. Such updates and supplements are to be physically maintained with the Manual and are to be incorporated by reference as part of this Manual when issued. However, there may be instances where it would be inappropriate for the procedures or guidelines contained herein to be followed. In any such case the Responsible Officer/Division Officer is responsible for with the particular transaction must agree the revised procedures to be followed with the Executive Director / Responsible Officer or the Compliance Officer. The Compliance Division must keep written record of any agreed variation.
Section 1: INTRODUCTION
Objective of the Operations and internal control procedural Manual
Section 2: FINANCIAL RESOURCES RULES
Minimum Liquid Capital Requirement
Chapter 3: JOB DESCRIPTIONS & ACCOUNTABILITY
Responsible parties
Job Description
Section 4: ANTI-MONEY LAUNDERING/ANTI-TERRORISM
Relevant Legislation
Money Laundering
Stages of money laundering
Definition of terrorist financing
Section 5: IDENTIFICATION OF YOUR CLIENTS
New Client
Origination of client’s instructions
Section 6: INDIVIDUAL/CORPORATE CLIENT
ACCOUNT OPENING DOCUMENTS-SECURITIES CASH
AND MARGIN
Sales Team Structure
Registration and Capabilities
Client Account Opening
Professional Investors
Amendments to account opening documents
Closure of Accounts
Section 7: TRADING AND CREDIT LIMIT POLICY - CASH AND MARGIN
Trading Limit
Sales Credit Policy
Section 8: ORDER HANDLING AND DEALING
Diligence
Client’s Order Handling Procedures
Future Dealing Procedures
Through Account Executive
Direct to Dealing Department
Access to Dealing Room
Branch Office's dealing procedures
Internet Trading System for clients
Client Priority
Trading Errors
Records Maintaining
Section 9: EMPLOYEE DEALING POLICY
To whom this policy applies
Objectives
Scope of this policy
Mandatory Rules
General Restrictions
Penalties for Non compliance
Section 10: FUTURES MARGIN LENDING POLICY
Prudent Banking borrowing
Margin Call Policy
Margin Calls
Position Limits
Margin Call Procedures
Section 11: FUTURES SETTLEMENT OPERATION
On Trade date
On T + 1
On T + 2
Cash settlement
Funds withdrawals from Clients’ accounts
Clients Deposits
Clients Withdrawal
Section 12: FUTURES RECONCILIATION
Daily Reconciliation
Monthly Reconciliation
Section 13: BANK AND TRUST ACCOUNTS RECONCILIATION
Section 14: CONTINGENCY POLICY
Section 15: HANDLING COMPLAINTS
How to use this Document?
This document should be carefully read by the respective financial institutions.
This template may be used upon the Operational manual and Internal Control Procedure in relation to trading of securities for a financial brokerage.
This is in accordance with SFC and HKMA regulations.
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