HONG KONG (Reuters) - Hong Kong's securities regulator said on Thursday it had fined a local unit of HSBC Holdings Plc <HSBA.L> <0005.HK> HK$9.6 million (938,707 pounds) for systemic deficiencies in its bond selling practices.
A strong message had to be sent to the market to deter similar misconduct, the Securities and Futures Commission (SFC) said in a statement. The regulator said in February that the mis-selling of financial products was "on its watch list".
The SFC said HSBC Broking Securities (Asia) did not conduct proper and adequate product due diligence on individual bonds before making recommendations to its clients, and did not have an effective system in place to assess its clients' risk profile and to ensure that its recommendations were suitable and reasonable.
The fine took into account the fact that HSBC had not put in place an effective system despite the SFC's repeated reminders to licensed corporations on the importance of compliance with their suitability obligations, it added.
It also noted that there is currently no evidence suggesting any client has complained about HSBCBS’s selling practices or suffered losses. The deficiencies were for a period between April 2015 and March 2016.
In a statement, HSBC said that it acknowledges and apologises for the deficiencies.
"HSBC Broking has strengthened its sales suitability framework and cooperated with the Securities and Futures Commission fully in resolving its concerns. HSBC is committed to ensuring fair outcomes for customers and complying with all the regulations that govern our businesses,” the statement said.
(Reporting by Alun John; Editing by Vyas Mohan)
