SFC fines HSBC Trinkaus Investment Management Limited

On May 4 2011, the SFC reported that it had resolved its disciplinary action with HSBC Trinkaus Investment Management Limited (HSBC Trinkaus)  in relation to its distribution of equity linked notes (ELNs) . Under the resolution, the SFC reprimands HSBC Trinkaus, fines it $3 million, and partially suspends its licence for two years from 30 April 2011 to 29 April 2013.

The SFC investigation revealed that HSBC Trinkaus did not have adequate procedures to:

• ensure that its recommendations or solicitations made to customers in relation to the ELNs were suitable for and reasonable in all circumstances of each of the customers;
• ensure adequate product due diligence had been conducted on ELNs before making recommendations or solicitations to the customers for them to invest into the ELNs; and
• adequately document the investment advice given, in particular in relation to ELNs, to its customers and the rationale underlying the advice and to provide customers with a copy of the written advice.

Further details are available here.