HSBC Trinkaus, a private bank in which HSBC owns nearly 80% of the shares and Germany’s Landesbank Baden-Wuerttemberg, the remainder, was investigated over its sale of equity-linked structured notes to customers.
As a result of the investigation – which found various failings in Trinkaus’s sales and due diligence processes – two of the bank’s licences have been partially suspended by the SFC.
These are the Type 1 – dealing in securities, and Type 4 – advising on securities, licences. The suspensions relate to what were described as over-the-counter or non-exchanged-traded structured notes.
In an enforcement notice, the regulator said Trinkaus did not ensure its recommendations were “suitable and reasonable” for all customers or carry out sufficient due diligence on the products themselves. It further found the bank did not adequately document the advice process and provide customers with a written copy of the advice it had given them.
Mark Steward, SFC executive director of enforcement, said, “Suitability, product due diligence and record keeping are three key obligations that intermediaries must satisfy when recommending or advising customers about securities.”
The SFC provide information on what prompted its investigation, or when it began.
