HSBC Broking Securities (Asia), the securities unit of British banking group HSBC, has been fined HK$9.6m ($1.2m) by Hong Kong’s Securities and Futures Commission (SFC) for misconduct in bond selling activities.
The regulator said that the company failed to deploy effective due diligence on individual bonds before making recommendations to clients between April 2015 and March 2016.
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The company was accused of carrying out 378 transactions of bonds and making 153 recommendations to clients during the period.
The entity was also accused of failing to have proper systems to evaluate the risk profile of its clients, and offering insufficient product information to its sales staff.
At the same time, the company failed to maintain proper records of the recommendations provided to clients, SFC said.
In determining the penalty, SFC considered the remedial measures taken by the company and said that “a strong message has to be sent to the market to deter similar misconduct”.
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By GlobalDataMoreover, the regulator did not find evidence of clients suffering any losses from the misconduct.
In response, HSBC said: “HSBC Broking has strengthened its sales suitability framework and cooperated with the SFC fully to resolve its concerns.”
