An SFC investigation into the bank found that it had failed to implement adequate internal controls to ensure its positions in listed companies were properly monitored and disclosed to the Stock Exchange of Hong Kong.
It found that the bank’s electronic position monitoring system did not automatically capture equity positions that were processed and settled under the settlement system used in Singapore in its fixed income division.
It said the bank was aware of this limitation but failed to implement “adequate procedures or training” to guide its relevant business groups in reporting equity positions that did not automatically feed into the system.
In making the decision, the SFC took into account the facts that the bank reported the matter and has since strengthened its internal monitoring controls.
The issue was first brought to the SFC’s attention when Deutsche failed to disclose changes to its percentage holdings in the issued capital of Up Energy Development Group in 2011.
In April the Royal Bank of Scotland was fined HK$6m (£460k, $770k) and received its second regulatory wrist slap in less than one month after the SFC found internal control failures relating to the detection and prevention of unauthorized trading activities and the conduct of its emerging markets rates business.
