Hong Kong Regulator Fines Wealth Manager

(Picture Shutterstock)

(Picture Shutterstock)

For the second time within weeks a global bank has been disciplined in Hong Kong. French banking giant BNP Paribas Wealth Management has been fined $4 million for overcharging its clients. 

The Securities and Futures Commission (SFC) investigation found that at the material time, the monetary benefits, including charges, mark-ups and fees, received by BNP Paribas Wealth Management (BNP PWM) from around 2,300 client transactions exceeded the levels it represented in its documentation provided to the clients.

The total overcharged amount was around $9.5 million. The affected transactions covered different types of investment products, including equities, bonds, structured products, options, swaps and funds, between 1 January 2011 and 31 December 2013.

Global Banks Hit 

The SFC considered BNP PWM’s conduct was in breach of the Code of Conduct by failing to exercise due skill, care and diligence to ensure the monetary benefits it received from client transactions were fair and reasonable, and in accordance with its representations to the clients.

In determining the sanction, the SFC considers that the level of fine would have been higher but for the facts that BNP PWM self-reported the matter to the SFC and HKMA and agreed to engage an independent reviewer to review and ensure all overcharged amounts are returned to the affected clients.

The firm has also repaid all overcharged amounts received from current clients and is in the process of repaying former clients, which no longer retain an account with BNP PWM.

Last month finews.asia reported that SFC hit Morgan Stanley Hong Kong Securities (MSHK) over its internal control failures. Under the resolution, the SFC reprimanded and fined MSHK $18.5 million for breaches of the Code of Conduct. 


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