UBS fined by HK regulator for overcharging clients
(12 November 2019 – Hong Kong) Swiss bank UBS has been fined US$51 million in Hong Kong by the Securities and Futures Commission (SFC) for overcharging thousands of customers for bond trades over almost a decade.
The SFC said on Monday that between 2008 and 2015 Hong Kong clients of UBS’s wealth management division were forced to pay more for bonds and structured debt products after the bank added a further “spread” to the trades that clients in its flagship wealth management business had requested.
The Swiss bank also took two years to report the misconduct after discovering it, the SFC said of a practice that involved almost 30,000 transactions and about 5,000 clients accounts managed in Hong Kong. UBS has also agreed to repay about HK$200m to the affected clients.
The penalty is the latest UBS has been hit with in Hong Kong. In March, the SFC suspended for 12 months its Hong Kong licence to advise on corporate finance in connection with its failures as a sponsor of Chinese initial public offerings in an action that also saw several other major banks fined.
A lack of supervision of staff and “failures of the first and second lines of defence functions” of UBS contributed to the conduct, the regulator said its investigation had found.