Orders of the MMT

At the end of any proceedings, the MMT may under Section 257(1) impose the following sanctions on any person found to have committed market misconduct:

1. a disqualification order – that a person shall not, without the leave of the Court of First Instance, be or continue to be a director, liquidator, or receiver or manager of the property or business, of a listed corporation or any other specified corporation or in any way, whether directly or indirectly, be concerned or take part in the management of a listed corporation or other specified corporation for up to 5 years;
   
   
2. a cold shoulder order – that a person shall not, without the leave of the Court of First Instance, in Hong Kong, directly or indirectly, deal in any securities, futures contract or leveraged foreign exchange contract, or an interest in any of them or a collective investment scheme for up to 5 years;
   
   
3. a cease and desist order – that the person must not again engage in any specified form of market misconduct;
   
   
4. a disgorgement order – that the person pay to the Government an amount up to the amount of any profit gained or loss avoided as a result of the market misconduct;
   
   
5. Government costs order – that the person pay to the Government its costs and expenses in relation to the proceedings and any investigation;
   
   
6. SFC costs order – that the person pay the SFC's costs and expenses in relation to any investigation; and
   
   
7. disciplinary referral order – that any body which may take disciplinary action against the person as one of its members be recommended to take such action against him.
   
   

The ability of the IDT to impose high fines (which could be up to 3 times the amount of profit made or loss avoided as a result of insider dealing) has been abandoned in favour of a wider range of civil sanctions. In addition, a disgorgement order may, at the discretion of the MMT, be made subject to compound interest from the date of the occurrence of the market misconduct in question (Section 259). The SFC also has the ability to fine regulated persons (see 'Disciplinary Proceedings' below).

When making an order, the MMT may take account of any previous convictions in Hong Kong, any previous findings of market misconduct by the MMT and any previous findings of insider dealing under the S(ID)O (S257(2)).

Cold shoulder orders, cease and desist orders, SFC costs orders and disciplinary referral orders were introduced by the SFO. Failure to comply with a disqualification, cold shoulder or cease and desist order is a criminal offence under sub-sections 257(10) and 258(10) punishable by a maximum fine of $1 million and/or up to 2 years' imprisonment.

In addition, Sections 253(2) and 254(6) prescribe a penalty of a maximum fine of $1 million and a maximum of 2 years' imprisonment for failure to comply with various requirements of the MMT or disrupting its proceedings. The conduct referred to in those sections and in Sections 257(10) and 258(10) is also liable to be punished as contempt under Section 261.