The Australian Securities and Investments Commission (ASIC) has accepted an enforceable undertaking (EU) from HSBC Bank for potentially delivering deficient advice to clients on retail structured products between January 2009 and March 2013.
The EU came after ASIC monitored HSBC’s advice on retail structured products, which found cases where advisers failed to obtain sufficient or any information about clients’ relevant personal circumstances, and flagged concerns the advice may not have suited clients.
As a result, HSBC may not have complied with certain obligations under the Corporations Act and HSBC’s Australian financial services licence (AFSL).
HSBC thereafter reviewed all of its advice on structured products and lodged a breach notification with ASIC and reported potential deficiencies in advice provided to around 464 of the 557 clients reviewed.
ASIC deputy chairman, Peter Kell, said: “Clients affected by the breach will have an opportunity to have their advice reviewed, and where instances of poor advice that led to financial loss are identified, to receive compensation”.
“The independent expert will assess the adequacy of the remediation program, HSBC’s compliance with the EU, and will report its findings to ASIC.”
Under the EU, HSBC would have to create and implement a remediation plan to ensure clients are reviewed in an honest manner, determine whether the problems identified in the advice extend to clients who were advised to invest in other types of products between January 2009 and March 2013, and if so to ensure they are also remediated, and appoint an independent expert to report to ASIC on the adequacy of HSBC’s review and remediation program.
