Hong Kong’s securities markets watchdog has granted another license to an equity capital markets specialist hedge fund, even as it tightens scrutiny over so-called block trades.

Former Goldman Sachs Group Inc. partner Jamie Goodman won a license on Aug. 2 for his Millennium Management LLC-backed hedge fund firm Pamalican Asset Management Ltd., according to information posted on the website of the city’s Securities and Futures Commission.

The license is the second handed to a new equity capital markets-focused hedge fund firm since mid-July, when Pascal Guttieres’s Viridian Asset Management Ltd. got the nod. Some observers had previously feared the ongoing criminal prosecution of Segantii Capital Management Ltd. would hold up approvals for new firms to operate in the same space.

The SFC is walking a tightrope between cracking down on market irregularities and reviving Hong Kong’s image as a major regional financial hub.

In in early May, the SFC charged Segantii, founder Simon Sadler and former trader Daniel La Rocca for dealing with insider information ahead of a 2017 block trade.

Block trades are off-exchange sales of large chunks of shares. Regulators in the US and Hong Kong have been cracking down on information sharing that has allowed banks to avoid losing money on such transactions, while giving certain clients an edge in trading. Hong Kong’s SFC is pushing ahead with a new set of guidelines on the so-called “market sounding” practice of gauging investor demand for upcoming deals.

Segantii was among the first ports of call for bankers and traders in such deals, earning Sadler the moniker of Asia’s block trade king. It has also helped advance the career of bankers and traders.

Goodman was a block trade specialist on the sales trading desk at Goldman Sachs, whose clients included Segantii. He was promoted to partner in November 2018. A stint at Maven Investment Partners Ltd. followed.

Millennium is backing Pamalican with as much as $500 million. Izzy Englander’s $68 billion firm has over the years struck deals with external teams, in which they exclusively manage money for Millennium initially, before opening up to other investors. They often start trading with part of the Millennium money committed, ramping up as they go.

  - Bloomberg