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Sanction on JKO Asset Management for Violation of Futures Trust Enterprises Related Laws and Regulations


The Financial Supervisory Commission (FSC) approved JKO Asset Management Co., Ltd.’s (hereinafter referred to as JKO Asset Management) penalty case for violating laws and regulations. The FSC discovered that during the period from October to December 2020, JKO Asset Management did not treat all fund investors fairly in its mutual fund allocation operations and violated futures trust enterprise-related laws and regulations. In accordance with the Futures Trading Act, the FSC imposes a warning and a fine of NT$1.2 million on JKO Asset Management.

1. Date the penalty was imposed: June 20, 2023
2. Recipient of the penalty: JKO Asset Management.
3. Legal basis of the penalty: Paragraph 1, Article 100 and sub-paragraph 2, paragraphs 1, Article 119 of the Futures Trading Act. Paragraph 2, Article 6 and paragraph 3, Article 33 of the     Regulations Governing Futures Trust Enterprises.
4. Facts of the violation and reasons: 
(1) JKO Asset Management did not fairly treat all fund investors of JKO S&P GSCI Brent Crude 2X Leveraged ER Futures ETF (hereinafter referred to as Brent Crude 2X Futures ETF), violated paragraph 2, Article 6 and paragraph 3, Article 33 of the Regulations Governing Futures Trust Enterprises, and was fined NT$600,000 by the FSC on September 29, 2020. The FSC’s sanction letter was announced on September 30, 2020 and delivered to JKO Asset Management.
(2) During the period from October to December 2020, JKO Asset Management did not have relevant evaluation principle for quota and objects when allocated the Brent Crude 2X Futures ETF. Besides, on October 5, 2020, many securities firms submitted their subscriptions, but JKO Asset Management only allocated the Brent Crude 2X Futures ETF to specific foreign institutional investors; on October 29, November 2, November 4, December 2, December 10 and December 29, many securities firms submitted their subscriptions, but JKO Asset Management allocated the Brent Crude 2X Futures ETF to specific foreign institutional investors and the allocations accounted for 30% to 80% of the respective total daily allocation volume. There was no relevant reason or basis for such allocation decisions and JKO Asset Management obviously did not treat all fund investors fairly.
(3) The facts above indicate that even after being sanctioned by the FSC on September 29, 2020, JKO Asset Management did not treat all fund investors fairly in accordance with its internal control system requirements and Article 15 of the “Procedures for the offering, issuance, sale, subscriptions and redemptions of futures trust fund” by the Chinese National Futures Association.
5. Results of penalty: JKO Asset Management was issued a warning and an administrative fine of NT$1.2 million pursuant to sub-paragraph 1, Article 100 and sub-paragraph 2, paragraph 1, Article 119 of the Futures Trading Act.
 
Visitor: 276   Update: 2023-06-30
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