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HSBC fined for regulatory breaches

Published 14/09/2016

The Securities and Futures Commission penalty follows an investigation into HSBC's positions on the Hang Seng China Enterprise Index
The Securities and Futures Commission penalty follows an investigation into HSBC's positions on the Hang Seng China Enterprise Index

Hong Kong's securities watchdog has slapped HSBC with a 2.5 million HK dollar (£243,993) fine for regulatory breaches dating back to 2014.

The Securities and Futures Commission (SFC) penalty follows an investigation into HSBC's positions on the Hang Seng China Enterprise Index (HSCEI).

It found that the bank breached the limit of open positions it could hold in HSCEI futures and options contracts on two separate occasions - May 26 and August 1 2014.

The SFC said HSBC failed to "implement adequate internal controls" to ensure it complied with those limits.

"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 SFC said.

An HSBC spokesman said: "HSBC apologises for the breaches identified and reported to the Securities and Futures Commission in 2014.

"The Bank has co-operated 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."

It adds to a growing list of charges linked to HSBC's conduct in recent years.

The bank was fined £325 million by US authorities earlier this year over "abusive mortgage practices" between 2007 and 2009 in the midst of the financial crash.

Back in 2012, HSBC paid £1.2 billion after US prosecutors said the bank violated US sanctions and failed to implement anti-money laundering programmes.

The lender is also one of the many UK banks to have been hit as a result of investigations into payment protection insurance (PPI) mis-selling.

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