CLSA Exits Margin Dealing, Moves to Healthcare

The Hong Kong-based broker, CLSA Premium Limited, has stopped offering margin dealing services. Instead, it will focus on its new healthcare business, which started in mid-2022.

At last week’s annual general meeting, the company’s shareholders voted unanimously for proposed business area changes. There have been positive outcomes following the group’s exploration into the healthcare business in mid-2022. The company’s notice stated that the healthcare business had contributed most of the group’s revenue and profit in the first quarter of 2023.

A Troubled Broker

CLSA (formerly – KVB Kunlun) has faced difficulties for several years. The company had offices in Hong Kong, Australia, and New Zealand.

The Kiwi regulator first raised concerns regarding CLSA’s New Zealand subsidiary in 2014 due to violations in their business practices, and further violations were found in 2018, despite the broker’s efforts to improve. As a result of these violations, CLSA’s New Zealand subsidiary received a NZ$770,000 monetary fine and had additional licensing conditions imposed for serious anti-money laundering breaches.

Last year, CLSA stopped its operations in Australia and New Zealand. Their Hong Kong-registered entity exclusively offers margin dealing and bullion trading services.

The company’s board has decided to suspend the Margin Dealing Business due to limited prospects for obtaining new clients and improving its performance. Instead, the board believes that the resources and effort devoted to this business would be more effectively utilized in healthcare.

Previously, KVB Holdings, one of the major shareholders, had requested multiple times for CLSA to wind down. KVB Holdings believed that the broker’s level of operations was not up to the mark and was in a weak financial state. Despite this, CLSA did not comply with the requests.