Hong Kong's securities regulator has publicly reprimanded and fined HSBC HKD2.5 for regulatory breaches and internal control failings.
The Securities and Futures Commission (SFC) said HSBC failed to put in place adequate internal controls to monitor its positions in Hong Kong Futures Exchange's futures and options contracts to ensure compliance with the prescribed limit.
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The regulator added that HSBC held open positions in Hang Seng China Enterprises Index futures and options contracts, which violated the prescribed limit on 18 occasions from 26 May to 1 August 2014.
The bank also failed to comply with SFC’s code of conduct by lacking sufficient controls to monitor its positions in Hong Kong Futures Exchange’s (HKFE) futures and options contracts.
“In deciding the penalty, the SFC has taken into account that HSBC has since taken steps to improve its internal controls on monitoring of position limit and co-operated with the SFC in resolving the SFC’s concerns,” the regulator added.
HSBC apologised for the breaches and said that it has cooperated with the securities watchdog.
“HSBC apologises for the breaches identified and reported to the Securities and Futures Commission in 2014. The bank has cooperated fully with the SFC throughout this investigation and has taken actions to improve our internal controls regarding our compliance with the prescribed position limits in Hong Kong. No clients were impacted by these breaches,” the bank said.
