UBS has been under SFC investigation following its role as a sponsor for certain initial public offerings listed on the Hong Kong Stock Exchange, according to the bank’s annual report.
Earlier this month, the regulator issued a decision notice in relation to one of the offerings under investigation. The notice imposes a fine of HK$119m (£10.9m, $15.2m, €12.3m) and a suspension of UBS Securities Hong Kong’s ability to act as a sponsor for Hong Kong IPOs for 18 months.
The regulator did not elaborate on the nature of the regulatory breach.
In its annual result, the bank said: “UBS intends to appeal the decision.”
Deutsche Bank
Separately, the SFC reprimanded Deutsche Bank and Deutsche Securities Asia over regulatory breaches related to short position reporting, unlicensed regulated activities and segregation of client monies, according to a statement from the regulator.
It also imposed a fine of HK$8.3m.
According to the SFC’s notice, Deutsche Bank failed to report 792 reportable short positions between June 2012 and January 2015. It also published 49 research reports between 2015 and 2017 on futures contracts without having the proper licence.
The regulations state that a firm that distributes research reports on futures contracts is required to be registered with the SFC and have a Type 5 (advising on futures contracts) licence.
In addition, Deutsche Securities also failed to segregate monies within the timeline prescribed by the Securities Futures Rules in 117 incidents between 2010 and 2014.
CLSA
In another separate move, the regulator also reprimanded CLSA; which provides equity broking, corporate finance & capital markets and asset management services to global corporate and institutional clients.
The fines relate to internal control failures linked to the firm’s client facilitation services and reporting obligations, imposing a fine of HK$9m.
An independent review showed that despite having introduced client facilitation services in 1986, CLSA did not put in place controls to prevent co-mingling of agency execution and client facilitation trading until March 2016 – 30 years later.
In addition, the regulator said CLSA did not notify the SFC until February 2015, despite having learnt as early as April 2013 that its licensed representatives were suspected of violating overseas regulatory requirements and being investigated by an overseas regulator.
