Hong Kong's Securities And Futures Commission Fines Hang Seng Bank For Misconduct
Hong Kong's Securities And Futures Commission Fines Hang Seng Bank For Misconduct
The bank was accused of charging excess fees but failed to disclose trailer fee arrangements
Hong Kong's Securities and Futures Commission (SFC) has imposed HK$66.4 million ($8.52 million) on Hang Seng Bank for overcharging clients while selling investment products from February 2014 to May 2023.
The bank was accused of charging excess fees but failed to disclose trailer fee arrangements
However, following regulatory findings, it has compensated affected clients and improved internal controls.
The securities regulators said that from 2014-2023, the bank earned at least HK$22.4 million in excess fees. It asked some clients to conduct frequent collective investment schemes (CIS) transactions with short holding periods, exposing them to ‘significant’ losses.
The SFC claimed, "Hang Seng Bank's internal controls were deficient in that they did not adequately supervise and monitor the sale of CIS to its clients.”
The bank, a 63.1 percent-owned unit of HSBC, also failed to disclose trailer fee arrangements to clients trading in investment funds.
The matter came to the regulator's knowledge, noting the bank’s reports and an investigation by the Hong Kong Monetary Authority.
