Hong Kong's Securities and Futures Commission fined investment banks CLSA Ltd. HK$9 million, and Deutsche Bank AG and its unit Deutsche Securities Asia Ltd. HK$8.3 million, the regulator said in separate March 13 releases.
The authorities found that CLSA failed to instantly notify the SFC until February 2015 that its licensed representatives were suspected of violating overseas regulatory requirements, and were being investigated by an overseas regulator. This came despite CLSA knowing of the suspected violation as early as April 2013.
CLSA undertook a joint review with the regulator in November 2016 to address the concerns and identify internal control failures, the SFC added, with the bank's board committed to implementing reasonable steps within the next 12 months to fix such deficiencies. CLSA is a unit of CITIC Securities Co. Ltd.
The regulator also fined Deutsche Bank and its Deutsche Securities Asia Ltd. unit for the former's failure to meet short position reporting requirements, and the latter's negligence in segregating client monies within a prescribed timeline. Deutsche Bank had also published research reports on futures contracts without the required Type 5 regulated activity registration.
The two companies would have received a "substantially higher level of fine," the SFC added, but for their cooperation in expediting disciplinary processes.
