CLSA Premium suspends margin dealing business
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CLSA Premium Limited, a brokerage company whose headquarters are based in Hong Kong, has announced plans to shut down its margin dealing operations. The broker has shifted its attention to focus on its new healthcare operations. CLSA ventured into the healthcare industry in mid-2022.
CLSA Premium halts margin dealing
The decision to halt margin dealing was reached after the company held an annual general meeting last week. During this meeting, shareholders made a unanimous vote for the proposed changes within the business areas of the company.
A notice that was published by the company said that since it started exploring the healthcare industry, the company had seen a positive outcome. It also said that the first quarter of the year had seen a majority of revenues and profits from the company coming from the healthcare business.
“Since the Group launched the initial exploration into the healthcare business in mid-2022, the Group has generally seen [a] positive outcome. In the first quarter of 2023, [the] large majority of the Group’s revenue and profit [is] contributed by the healthcare business,” the notice read.
Troubled brokerage company
CLSA is a financial brokerage company that is also known as KVB Kunlun. The broker has been in trouble over the years. Besides having a presence in Hong Kong, where its headquarters are located, the broker also has a presence in markets such as Australia and New Zealand.
Authorities flagged the operations of the New Zealand subsidiary for CLSA. The firm was flagged by the Kiwi regulator in 2014, which also accused the company of violating business practices. The regulator also said that there were lapses in 2018 despite the broker making some improvements.
The violations committed by the company resulted in a monetary fine of NZ$770,000 on the New Zealand subsidiary for the CLSA. The company was accused of a wide range of activities, such as failing to comply with anti-money laundering rules and failure to abide by multiple additional licensing requirements.
The company has already shut down its operations in Australia and New Zealand. These operations were suspended in 2022, and since then, the company has only provided margin dealing and bullion trading through a company that has been registered in Hong Kong.
The notice from the company also said that the board had considered that there be a limited prospect for the margin and bullion trading operations at the company. These operations are collectively known as the “Margin Dealing Business,” and it will enable the firm to obtain new clients and boost its performance.
The board has also said that the resources and effort directed to the Margin Dealing Business be better used within the healthcare industry. It has also announced plans to suspend the operations of this Margin Dealing Business.
The CLSA had earlier turned down several requests to wind down its operations. The requests were filed by one of the major shareholders at CLSA, known as KVB Holdings. According to this shareholder, the broker had shown an insufficient level of operations, and it was currently in a poor financial position.
