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Tuesday, July 10, 2018 - Hong Kong fines Citi Asia unit $509,710 for 'dark pool' breaches
Citigroup
Source - https://www.reuters.com/article/us-hongkong-regulator-citigroup/hong-kong-fines-citi-asia-unit-509710-for-dark-pool-breaches-idUSKBN1K0144
Where - Hong Kong, Special Administrative Region of the People's Republic of China
Cost - 4,000,000 HKD
Business line - Trading and Sales

Hong Kong’s securities commission has fined a unit of Citigroup HK$4 million ($509,710) for breaching “dark pool” regulations, the regulator said on Tuesday.

Dark pools, known officially in Hong Kong as alternative liquidity pools (ALPs), are anonymous trading platforms offered by banks to help large investors trade big blocks of shares without having news of their orders move the price.

The pools have attracted attention from regulators around the world and led some banks to close pools.

Hong Kong’s Securities and Futures Commission (SFC) said it carried out a review of ALPs between 2016 and 2017 and became concerned about Citi Match, the dark pool operated by Citigroup Global Markets Asia Ltd.

Citi Match failed to comply with “the relevant requirements” from December 2015 to August 2016, the regulator said.

It said an incorrect system setting for client profiles had allowed more than 130 clients to access the ALP without being assessed as to whether they were qualified investors.

The U.S. bank said that it cooperated with the commission and had already taken remedial actions.

“Citi would like to confirm that there was no financial impact on affected clients, who were all qualified investors, and no client opted-out of Citi Match after being specifically provided with the ALP guidelines, which were available at all relevant times on Citi’s website,” the bank said in a statement.