Core Points - The Hong Kong Securities and Futures Commission (SFC) reprimanded UBS AG and imposed a fine of HKD 8 million due to deficiencies in its internal systems and monitoring measures, which led to inaccurate classification of clients' professional investor status over a period of more than 12 years [1][2] - UBS's automated program misinterpreted the minimum investment portfolio requirements under the Securities and Futures (Professional Investors) Rules, resulting in misclassification of certain joint accounts as professional investor accounts when they should have been classified as non-professional investor accounts [1][2] - UBS provided securities lending services to non-professional investors without obtaining valid permanent authorization and sold investment products restricted to professional investors to non-professional clients [1][2] Summary by Sections - **Investigation Findings** - The SFC's investigation revealed that from 2009 to July 2022, UBS incorrectly classified 560 joint accounts as professional investor accounts [1] - Among these, 23 accounts used securities lending services involving 9,190 transactions of securities listed on the Hong Kong Stock Exchange, and 94 accounts engaged in 500 transactions of products limited to professional investors [2] - **Regulatory Concerns** - The SFC criticized UBS for failing to act with appropriate skill and care, and for not establishing effective systems and monitoring measures to ensure accurate classification of clients' professional investor status [2][3] - The SFC considered several factors in its decision, including the duration of UBS's deficiencies, previous disciplinary actions against UBS for similar issues, and UBS's cooperation with the SFC in addressing concerns [3] - **Remedial Actions** - UBS conducted a review from July 2018 to July 2022, identified violations, and took remedial actions to strengthen its internal monitoring measures and systems [3] - UBS plans to implement enhanced complaint handling procedures to review any complaints from clients who may have been incorrectly classified as professional investors during the relevant period [3]