The firm failed to comply with cash management guidelines involving SFC funds.
The Securities and Futures Commission slapped Hang Seng Investment Management Limited (HSIM) with $3m penalty over its failure to comply with regulatory requirements on cash management involving SFC-authorised funds.
HSIM, the investment arm of Hang Seng Bank, was found to have maintained substantial cash deposits at an interest lower than the prevailing commercial rate. The amount of interest involved was approximately $875,648.
The regulator also discovered that HSIM did not apply procedures to check interest rate offered by banks on the deposits placed in the funds’ current accounts on the mistaken assumption that the accounts were non-interest bearing.
The funds’ trustees, however, confirmed that their accounts were actually interest bearing when HSIM reached out on July 2016.
“The SFC considers that HSIM’s internal controls and procedures on cash management of the funds at the relevant period were inadequate and it failed to manage and minimise the conflicting interests between the funds’ investors and its connected persons,” the regulator said in a statement.
The investment arm has agreed to make a voluntary payment of the equivalent amount to the affected funds to rectify the possible impact of its oversight.
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