A staffing error reportedly bypassed internal controls at Deutsche Bank which led to the expiration of its Hong Kong license to sponsor initial public offerings, marking a setback to the relaunch of its Asia equities business.
Deutsche Bank failed to replace to regulated staff on time which will cause its IPO sponsor license to lapse from next month, according to a «Financial Times» report citing unnamed sources.
Deutsche’s IPO principals until June were investment bankers Poon Tsz Yuen and Rowena Wang, as per the Securities and Futures Commission’s (SFC) register. According to the report, Poon left the bank on June 16 and Wang is set to be removed from the register of authorized principals in early July.
A spokesperson for the bank confirmed the license expiration and staff departures.
ECM Relaunch
The license expiration marks a setback to the relaunch of Deutsche Bank’s Asia equity capital markets (ECM) business after a restructuring in 2019 that saw Hong Kong shed alms all its ECM teams.
According to another unnamed source close to the SFC, the issue suggests that there were «poor internal controls» at the bank and that process hereafter is expected to be slow.
Separately, the SFC fined Deutsche Securities Asia last week for issuing incorrect statements to its prime brokerage clients and delaying the reporting of the failures to the regulator. And earlier today, the German lender’s Greater China investment banking vice chair Rowena Chu reportedly retired.
