The Financial Supervision Commission (FSC) on Tuesday reiterated that securities investment trust and consulting companies must enhance their internal controls to curb information leakage.
The statement came after the commission last month asked companies to strengthen supervision of fund managers’ use of personal communication devices at work.
“Companies are expected to maintain better discipline as breaches by a few workers could jeopardize public trust in the asset management industry,” Securities and Futures Bureau Chief Secretary Kuo Chia-chun (郭佳君) told a news conference in New Taipei City.
The commission would not make it mandatory for fund managers to hand in their mobile phones when entering trading rooms or offices, Kuo said.
However, companies must set clear internal controls and conduct solid risk management, she said, adding that while most companies do not allow fund managers to use private devices at work, they fail to maintain effective internal control.
The FSC fined Uni-President Assets Management Corp (統一投信) NT$1.8 million (US$60,729) as two of its fund managers used their mobile phones during office hours to leak transaction information.
The two fund managers, surnamed Liu (劉) and Chang (張), had for three years from 2017 during office hours told their relatives and friends to purchase equities related to funds under their management, Kuo said.
Regulations ban fund managers from privately trading equities or other financial products that are related to funds under their management to avoid conflicts of interest.
Liu and Chang had profited from relatives and friends selling those equities at higher rates later, Kuo said.
In April, in a similar case, the commission fined Capital Investment Trust Corp (群益投信) NT$1.2 million.
Kuo said Capital Investment failed to detect loopholes in its system that enabled its staff to break rules.
As Uni-President Assets Management failed to set up internal controls and to effectively supervise its fund managers, the commission suspended its general manager, surnamed Lee (李), for three months, Kuo said.
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