HSBC Broking Securities (Asia) has been reprimanded and fined HK$9.6m (£960,000) for “systematic deficiencies” in its bond-selling practices by Hong Kong’s financial regulator.
The Securities and Futures Commission (SFC) said HSBC failed to conduct proper due diligence on bonds before advising clients to invest in them, it did not have an effective system in place to assess its clients’ risk profile, did not properly train sales staff and did not maintain proper records of advice and solicitations given to clients.
When deciding on the penalty, the SFC took into consideration that HSBC failed to put in proper systems despite the regulator’s repeated reminders of the importance of compliance with suitability obligations and specific guidance on the selling of complex and high-yield bonds.
HSBC Broking said: “HSBC Broking has strengthened its sales suitability framework and cooperated with the Securities and Futures Commission fully in resolving its concerns. HSBC is committed to ensuring fair outcomes for customers and complying with all the regulations that govern our business.”
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