Position limits failures sees HSBC fined $2.5 million

Investigation found HSBC lacked knowledge on regulatory requirements for position limits.

HSBC has been fined $2.5 million for failing to identify its position limits and comply with regulatory requirements in Hong Kong.

An investigation carried out by the Securities and Futures Commission (SFC) found HSBC had breached the set position limit for the Hang Seng China Enterprises Index (HSCEI) futures and options contracts.

The limit was breached on 18 occasions between 2014 and 2015. 

The SFC said the bank had “failed to identify its position limit breaches promptly.”

“There were no policies and procedures in place for position limit monitoring and controls in relation to the Hong Kong Futures Exchange listed products,” it added.

It was also found that HSBC lacked adequate knowledge on its position limits in relation to regulatory requirements and compliance in Asia.

The SFC said the bank has now “taken steps to strengthen its internal controls on monitoring positions.”