Bank of China Ltd. subsidiary BOCI Securities Ltd. was fined HK$10 million by the Securities and Futures Commission for failing to meet regulatory requirements in its investment product selling practices, according to a March 18 release.
A probe initiated by the SFC uncovered a lack of compliance with regulatory requirements regarding client profiling, product due diligence and suitability assessment in the unit's sale and distribution of investment products. These included failing to assess and determine risk tolerance levels of certain clients and the investment strategies, carrying out due diligence of specific investment products and implementing effective internal controls overseeing the distribution of investment products to clients.
The regulator took into account that BOCI Securities took remedial measures to improve its suitability framework and cooperated with SFC to address the concerns to determine the penalty. Additionally, the company's plans to implement enhanced complaint handling procedures that will evaluate client complaints with regard to the sale and distribution of its investment products were also acknowledged and considered.