Measures will be taken to boost investor protection against misappropriation by stockbrokers, the Securities & Futures Commission says.

The commission's Intermediaries & Investment Products Director Alexa Lam said the important aspects to addressing the issue are continuing rigorous supervision of brokers, maintaining dialogue with the accounting profession, and educating investors on how to protect their own interests.

She said the commission has devoted additional resources to the supervision of brokers, adding decisive and tough actions will be taken against dishonest practitioners.

Noting the auditors' obligation to review how a broker handles its client assets and report any regulatory breaches to the commission, it will discuss with the Institute of Certified Public Accountants measures to strengthen co-operation. Suspected cases of auditors' professional negligence will be referred to the institute and auditors will be asked to conduct client circularisation in annual audits.

Staying vigilant

The commission will stay vigilant in supervising brokers and will help investors understand how to protect their own interests, Mrs Lam said.

Investors can click here for the common tricks brokers use to seek and misappropriate client assets and warning signals that they should watch for.

To protect their own interests, investors should:

* open an investor participant account;

* ensure timely receipts of the originals of monthly statements, verify the information immediately, and never allow brokers to hold them; and,

* perform checking immediately and revert to the auditors direct upon request from the auditors for verification of account positions.

Investors should contact the commission if they suspect any irregularities when dealing with their brokers. To learn more about how to protect their own interests, click here.