The Securities and Futures Commission issued a statement regarding HBSC’s cancellation of dividends, noting that it lacked the grounds to pursue regulatory action.
Following HSBC’s decision to scrap dividend payments last quarter to comply with the Bank of England’s request to exercise greater prudence in the midst of a coronavirus pandemic.
«The SFC does not usually comment on individual cases,» Hong Kong’s watchdog said in a statement. «However, in light of the significant public interest in this matter, the SFC is issuing this statement to inform the public about the actions that the SFC has taken, including its communications with the Bank of England’s Prudential Regulation Authority (PRA) and HSBC.»
Communication with BoE and HSBC
In the interest of the «investing public», the SFC said it had been in contact with HSBC and the PRA to communicate the qualms expressed by dismayed retail shareholders in Hong Kong which account for around one-third of the total shares.
The SFC said it «conveyed to them the views of sections of the investing public» which include the overall impact to Hong Kong’s retail shareholders; the reliance of many on dividends for regular income; and the timing of the cancelation compared to the previous quarter.
No Grounds
Nonetheless, the SFC noted that matters relating to banking and prudential supervision of HSBC extended beyond its regulatory scope.
«The SFC […] has concluded that there is at present no ground on which regulatory action should be pursued under the Securities and Futures Ordinance (SFO) in respect of the Cancellation and the Suspension,» it said.
According to an HSBC spokesperson, the bank’s board would review its dividend policy at or ahead of the year-end results for 2020 «when the economic impact of the pandemic is better understood».
