Hong Kong's securities regulator has announced penalties for UBS, Standard Chartered, Merrill Lynch and Morgan Stanley for sponsor failures.
The Securities and Futures Commission (SFC) of Hong Kong announced on Thursday penalties for UBS, Standard Chartered, Merrill Lynch and Morgan Stanley over their failures to discharge their obligations in IPO listing applications.
UBS AG and UBS Securities Hong Kong Limited (UBS Securities Hong Kong) were fined $375 million for failing to discharge their obligations as one of the joint sponsors of three listing applications: China Forestry Holdings Company (China Forestry), Tianhe Chemicals Group (Tianhe), and another unnamed listing application.
At the same time, Standard Chartered Securities (Hong Kong) Limited was fined $59.7 million for failing to discharge its obligations as one of the joint sponsors in relation to China Forestry's listing application in 2009. The regulatory body said Standard Chartered Securities had failed to make reasonable due diligence enquiries in relation to several core aspects of the firm's business.
Partial Suspension
The SFC also partially suspended UBS Securities' Hong Kong’s licence to advise on corporate finance for one year, to the extent that it shall not act as a sponsor for listing application on the Stock Exchange of Hong Kong Limited (SEHK) of any securities.
In response to the announced penalties, UBS said it has taken note of the findings of SFC's investigations and is «pleased to have resolved these legacy issues relating to our Hong Kong IPO sponsorship license.»
«We look forward to continuing to service our clients in Hong Kong,» a UBS spokesperson told finews.asia.
Tianhe Chemicals Group Listing
Separately, Morgan Stanley Asia and Merrill Lynch Far East were fined $224 million and $128 million respectively for failing to discharge their obligations as joint sponsors in relation to the listing application of Tianhe Chemicals Group (Tianhe) in 2014. SFC said its investigations revealed that the two banks failed to follow the specific guidelines on due diligence interviews.
The Hong Kong regulator also suspended the license of Cen Tian, a Hong Kong-based managing director at UBS, for two years from 14 March 2019 to 13 March 2021 for failing to discharge his supervisory duties as a sponsor principal for China Forestry’s listing application.
