Bank of China International Securities (BCIS) has been hit with a $1.27 million (HK$10 million) fine by Hong Kong’s securities regulator over its failure to follow guidelines on the selling of investment products.
The Securities and Futures Commission (SFC) stated that BCIS, a wholly owned subsidiary of Bank of China, had not properly assessed the risk tolerance levels of some of its clients and therefore not ensured that its investment recommendations were suitable.
Product governance has become a key focus in the global investment industry and a cornerstone of regulation over recent years.
It has become an especially pertinent issue in the Asia Pacific region following a year-long inquiry into the sale of investment products in Australia which resulted in a number of recommendations.
The SFC has also issued a number of fines in recent weeks as it looks to crack down on investment banks and their role in selling investment products as well as their duties in sponsoring initial public offerings (IPOs).
At the end of February the SFC fined Citigroup’s Asian business $7.26 million and in July it fined China Construction Bank International Capital $3 million in July.
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