(Reuters) -Hong Kong’s securities regulator said on Monday it had fined Hang Seng Bank HK$66.4 million ($8.52 million) for overcharging its clients while selling investment products.
The Securities and Futures Commission (SFC) said the bank earned at least HK$22.4 million in excess fees between February 2014 and May 2023, and exposed some clients to “significant” losses when it asked them to conduct frequent collective investment schemes (CIS) transactions with short holding periods.
“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 regulator said.
The bank, a 63.1%-owned unit of HSBC, also failed to disclose trailer fee arrangements to clients trading in investment funds, the SFC said.
The issues were brought to the SFC’s attention by Hang Seng Bank’s reports, as well as findings from an investigation by the Hong Kong Monetary Authority, the regulator said.
The bank has compensated impacted clients and taken steps to strengthen its internal controls, according to the SFC.
A spokesperson for Hang Seng Bank told Reuters that the issues have been fully remediated.
“We have also cooperated fully with the SFC and HKMA and have accepted the decisions made by the regulators,” the spokesperson said.
($1 = 7.7899 Hong Kong dollars)
(Reporting by Himanshi Akhand in Bengaluru; Additional reporting by Sneha Kumar; Editing by Shounak Dasgupta and Varun H K)
