Financial regulators in Hong Kong have taken stringent action against Hang Seng Bank (HSB) following a series of violations. The bank has been fined HK$66.4 million due to multiple infractions, including overcharging clients and failing to adequately disclose financial benefits. This significant penalty comes as a result of an extensive investigation by the Hong Kong Monetary Authority (HKMA) and the Securities and Futures Commission (SFC). According to the findings, HSB reportedly earned an excess of HK$22.4 million from improper fees and benefits between November 2014 and May 2023.

Regulatory concerns also arose regarding HSB's sales practices of collective investment schemes (CIS) products. Between June 2016 and November 2017, it was discovered that relationship managers influenced 46 clients to engage in excessive trading activities. These transactions were characterized by frequent trades with short holding periods, which did not align with the clients' investment objectives or preferred timeframes. Consequently, clients incurred substantial transaction costs. Additionally, the bank facilitated 148 transactions involving products that exceeded the clients' risk tolerance levels. During this period, 399 clients who lacked expertise in derivatives purchased such funds in 629 transactions, raising further red flags about the bank’s conduct.

HSB has acknowledged these issues and has taken steps to rectify them. The bank has compensated affected clients and implemented remedial measures to enhance its internal controls. Such actions reflect a commitment to addressing past shortcomings and ensuring adherence to regulatory standards. Moving forward, it is crucial for financial institutions to prioritize transparency and integrity in their dealings with clients. By fostering trust and upholding ethical practices, banks can contribute positively to the stability and growth of the financial sector.