HSBC unit is fined $9.6m for breachesBusiness | Jimmy Ding 20 Jul 2018
The Securities and Futures Commission reprimanded and slapped a HK$9.6 million fine on HSBC Broking Securities (Asia) for regulatory breaches over its sale of bonds.
The regulator cited the failure of HSBCBS to conduct proper and adequate due diligence on individual bonds before it made recommendations or conducted solicitations from its clients between April 2015 and March 2016.
During the period, HSBCBS executed 378 transactions involving bonds listed on the stock exchange, including 153 recommendations to or solicitations from clients.
SFC said HSBCBS failed to have an effective system to assess the risk profile of its clients and it also failed to provide adequate information to its sales staff.
The HSBC unit also failed to maintain proper documentary records of the investment advice or recommendations that it gave clients.
The Hong Kong and Shanghai Banking Corp has apologized for its unit's deficiencies.
"HSBC Broking has strengthened its sales suitability framework and cooperated with the SFC fully to resolve its concerns," HSBC said in a statement.