Enforcement collaboration between HKMA and SFC - SFC reprimands and fines HSBC HK$4.2 million for disclosure failures in research reports
The following is issued on behalf of the Hong Kong Monetary Authority:
The Securities and Futures Commission (SFC) has reprimanded and fined The Hongkong and Shanghai Banking Corporation Limited (HSBC) HK$4.2 million for breaching the disclosure requirement when publishing research reports on Hong Kong-listed securities over an eight-year period (Notes 1 to 3).
Following a self-report by HSBC, the Hong Kong Monetary Authority (HKMA), in collaboration with the SFC, conducted an investigation. Both regulators found that HSBC had failed to disclose and/or made incorrect disclosures regarding its investment banking relationships with various companies covered in research reports published between 2013 and 2021. These issues, which were caused by deficiencies in HSBC's data recording and mapping across systems, are estimated to have affected disclosures in over 4 200 research reports on Hong Kong-listed securities.
The SFC considers that HSBC has failed to ensure compliance with the disclosure requirement and the accuracy of disclosures in its research reports by acting with due skill and care, as well as implementing effective systems and controls.
In deciding the disciplinary sanction, the SFC has taken into account all relevant circumstances, including:
- there have been no evidence of client losses resulting from the disclosure issues;
- HSBC has conducted reviews to identify the root causes and extent of the breaches;
- HSBC has taken steps to enhance its systems and controls to prevent future breaches; and
- HSBC's co-operation with the HKMA and the SFC in resolving the concerns identified in the investigation.
A copy of the Statement of Disciplinary Action is available on the SFC website.
Note 1: This press release is issued jointly by the SFC and the HKMA.
Note 2: HSBC is registered to carry on Type 1 (dealing in securities), Type 2 (dealing in futures contracts), Type 4 (advising on securities), Type 5 (advising on futures contracts), Type 6 (advising on corporate finance) and Type 9 (asset management) regulated activities under the Securities and Futures Ordinance.
Note 3: Paragraph 16.5(d) of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission provides that a firm that has an investment banking relationship with the issuer or the new listing applicant should disclose that fact in the research report.
Seven persons arrested during anti-illegal worker operation
The Immigration Department (ImmD) mounted an anti-illegal worker operation codenamed "Contribute" today (January 15).During the operation, ImmD Task Force officers raided premises under renovation in a newly built public housing estate in Sheung Shui district.A total of six suspected illegal workers and one suspected employer were arrested. Thearrested suspected illegal workers comprise six men, aged 22 to 41. Furthermore, one man, aged 45, suspected of employing the illegal workers, was also arrested. An investigation into the suspected employers is ongoing, and the possibility of further arrests is not ruled out.
Apart from mounting the enforcement operation, ImmD officers and a promotional vehicle have been deployed to distribute "Don't Employ Illegal Workers" leaflets and convey the message in the estate.
An ImmD spokesman said, "Any person who contravenes a condition of stay in force in respect of him or her shall be guilty of an offence. Also, visitors are not allowed to take employment in Hong Kong, whether paid or unpaid, without the permission of the Director of Immigration. Offenders are liable to prosecution and upon conviction face a maximum fine of $50,000 and up to two years' imprisonment. Aiders and abettors are also liable to prosecution and penalties."
The spokesman stressed that it is a serious offence to employ people who are not lawfully employable. Under the Immigration Ordinance, the maximum penalty for an employer employing a person who is not lawfully employable, i.e. an illegal immigrant, a person who is the subject of a removal order or a deportation order, an overstayer or a person who was refused permission to land, has been significantly increased from a fine of $350,000 and three years' imprisonment to a fine of $500,000 and 10 years' imprisonment to reflect the gravity of such offences. The director, manager, secretary, partner, etc, of the company concerned may also bear criminal liability. The High Court has laid down sentencing guidelines that the employer of an illegal worker should be given an immediate custodial sentence.
According to the court sentencing, employers must take all practicable steps to determine whether a person is lawfully employable prior to employment. Apart from inspecting a prospective employee's identity card, the employer has the explicit duty to make enquiries regarding the person and ensure that the answers would not cast any reasonable doubt concerning the lawful employability of the person. The court will not accept failure to do so as a defence in proceedings. It is also an offence if an employer fails to inspect the job seeker's valid travel document if the job seeker does not have a Hong Kong permanent identity card. Offenders are liable upon conviction to a maximum fine of $150,000 and to imprisonment for one year. In that connection, the spokesman would like to remind all employers not to defy the law by employing illegal workers. The ImmD will continue to take resolute enforcement action to combat such offences.
Under the existing mechanism, the ImmD will, as a standard procedure, conduct an initial screening of vulnerable persons, including illegal workers, illegal immigrants, sex workers and foreign domestic helpers, who are arrested during any operation with a view to ascertaining whether they are trafficking in persons (TIP) and/or forced labour victims. When any TIP and/or forced labour indicator is revealed in the initial screening, the ImmD officers will conduct a full debriefing and identification by using a standardised checklist to ascertain the presence of TIP and/or forced labour elements. Identified TIP and/or forced labour victims will be provided with various forms of support and assistance, including urgent intervention, medical services, counselling, shelter or temporary accommodation and other supporting services. The ImmD calls on TIP and/or forced labour victims to report crimes to the relevant departments immediately.
For reporting illegal employment activities, please call the dedicated hotline 3861 5000, by fax at 2824 1166, email to anti_crime@immd.gov.hk, or submit "Online Reporting of Immigration Offences" form at www.immd.gov.hk.
Seven persons arrested during anti-illegal worker operation Source: HKSAR Government Press Releases
Seven persons arrested during anti-illegal worker operation Source: HKSAR Government Press Releases
