UBS Group AG does not expect the 18-month suspension on leading IPOs by Hong Kong's securities regulator to have a material impact on its operations until its appeal is heard, Reuters reported March 12, citing an internal memo.
The move comes after the Hong Kong Securities and Futures Commission, or SFC, suspended UBS Securities Hong Kong Ltd. from sponsoring IPOs for 18 months and imposed a fine of HK$119 million in relation to its role as sponsor in an offering listed on the Hong Kong Stock Exchange. While revealing the suspension in its 2017 annual report, the Swiss lender said it intends to appeal the SFC's decision.
In the memo sent by UBS's global and Asia-Pacific heads of investment bank, Andrea Orcel and David Chin, the Swiss bank told staff that "we are business as normal" until its appeal against the suspension is heard, Reuters said. The bank expects the full hearing of the appeal to be held in the fourth quarter and a final decision to come in early 2019.
The memo added that even if the proposed suspension is upheld, the bank would still be able to work on IPOs, including as a joint global coordinator, which is a step lower than sponsoring an IPO. The 18-month duration of UBS's suspension is longer than the six months that many bankers in Hong Kong had expected, the news outlet noted.
UBS declined to comment on the memo, Reuters said.
IPOs require at least one bank to sponsor the offer and a change in a company's sponsor during the listing process, due to any reason, including a sponsor's suspension, would mean beginning the whole process all over again.
