The Securities and Futures Commission of Hong Kong issued a statement of disciplinary action on 6 January 2026, reprimanding and fining Saxo Capital Markets HK Limited HK$4 million under section 194 of the Securities and Futures Ordinance. The regulator found that the Danish broker's Hong Kong subsidiary had distributed virtual asset-related products to retail investors without meeting the requirements that restricted such instruments to professional investors only, contrary to guidance in two SFC circulars that were in effect at the time.
The contraventions spanned a four-year period from November 2018 to November 2022, during which Saxo Capital Markets HK distributed 32 virtual asset-related complex products, comprising virtual asset funds not authorised by the SFC and other virtual asset-related products, to 136 clients. Of that total, 130 were retail investors who should not have received access to those products under the SFC's regulatory framework. The firm executed 1,446 transactions in breach of the SFC's 2018 Circular and a 2022 Joint Circular issued with the Hong Kong Monetary Authority, both of which required virtual asset-related products to be restricted to professional investors.
KEY REGULATORY FAILINGS IDENTIFIED
The SFC identified several specific compliance failures in Saxo Capital Markets HK's operational processes during the period. The firm did not conduct virtual asset knowledge assessments on clients prior to distributing the products, failed to provide virtual asset-specific risk warning statements as required, and performed inadequate product due diligence before making the instruments available on its online trading platform.
Saxo Capital Markets HK also relied on group-level screening protocols operated by its parent, Saxo Bank, which proved insufficient to identify the virtual asset exposure embedded in the products being distributed to clients in Hong Kong.
The SFC's 2018 Circular had set out that virtual asset funds should be offered only to professional investors. The SFC found that the firm failed to implement adequate and effective policies and controls for its online platform, in breach of the Guidelines on Online Distribution and Advisory Platforms and the Code of Conduct.
SELF-REPORTING AND VOLUNTARY REMEDIATION NOTED
Saxo Capital Markets HK self-reported the breach to the SFC after its parent company notified it in November 2022 of deficiencies in the group screening protocols. The firm also voluntarily compensated affected clients for losses attributable to the unauthorised transactions. The SFC took both steps into account when determining the HK$4 million penalty.
Saxo Capital Markets HK ceased all regulated activities in Hong Kong effective 28 February 2025, a further development that the SFC noted in its overall assessment of the disciplinary outcome.