The SFC fined HSBC $4.2 million for disclosure failures in research reports over an eight-year period. HSBC failed to disclose investment banking relationships, affecting over 4,200 reports, and faced no evidence of client losses.
This article was generated using SAMS, an AI technology by Timothy Loh LLP.
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On August 26, 2025, the Securities and Futures Commission ("SFC") imposed a fine of $4.2 million on The Hongkong and Shanghai Banking Corporation Limited ("HSBC") for violating disclosure requirements in research reports on Hong Kong-listed securities over an eight-year period.
An investigation, jointly conducted by the HKMA and the SFC following HSBC’s self-report, revealed that HSBC failed to disclose or made incorrect disclosures regarding its investment banking relationships with various companies. This was attributed to flaws in HSBC’s data recording and mapping across systems, impacting over 4,200 research reports.
The SFC concluded that HSBC had not adhered to disclosure requirements and failed to maintain the accuracy of its research reports by not exercising due skill and care, nor implementing adequate systems and controls.
In assessing the disciplinary action, the SFC considered various factors, including the absence of client losses resulting from disclosure issues, HSBC’s efforts to identify and address the root causes of the breaches, improvements to HSBC’s systems and controls, and HSBC’s cooperation with the regulators during the investigation.
This press release was issued jointly by the SFC and the Hong Kong Monetary Authority ("HKMA").
HSBC is authorized to engage in various regulated activities, including dealing in securities and futures, providing corporate finance advice, and managing assets, under the Securities and Futures Ordinance.
Paragraph 16.5(d) of the SFC’s Code of Conduct requires firms to disclose their investment banking relationships with issuers or new listing applicants in their research reports.
A copy of the Statement of Disciplinary Action is available on the SFC website, with the page last updated on August 26, 2025.
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