SFC reprimands and fines BNP Paribas Wealth Management $4 million 

The Securities and Futures Commission (SFC) has reprimanded and fined BNP Paribas Wealth Management (BNPPWM) $4 million for overcharging its clients between 1 January 2011 and 31 December 2013 (Note 1).

The SFC’s investigation found that at the material time, the monetary benefits, including charges, mark-ups and fees, received by BNPPWM from around 2,300 client transactions exceeded the levels it represented in its documentation provided to the clients.  The total overcharged amount was around $9.5 million.  The affected transactions covered different types of investment products, including equities, bonds, structured products, options, swaps and funds.

BNPPWM’s conduct was in breach of the Code of Conduct by failing to exercise due skill, care and diligence to ensure the monetary benefits it received from client transactions were fair and reasonable, and in accordance with its representations to the clients (Note 2).

In determining the sanction, the SFC considers that the level of fine would have been higher but for the followings:

• BNPPWM agreed to engage an independent reviewer to review and ensure all overcharged amounts are returned to the affected clients;
• BNPPWM has repaid all overcharged amounts received from current clients and is in the process of repaying former clients, which no longer retain an account with BNPPWM;
• BNPPWM self-reported the matter to the SFC and HKMA;
• BNPPWM proactively co-operated with the SFC in resolving the concerns; and
• BNPPWM has an otherwise clean disciplinary record.

Affected clients may contact BNP Paribas in relation to the repayment of the overcharged amounts (Note 3).

Notes:

1. BNPPWM is an authorized financial institution under the supervision of Hong Kong Monetary Authority (HKMA) and is a registered institution under the Securities and Futures Ordinance carrying on business in Type 1 (dealing in securities), Type 4 (advising on securities) and Type 9 (asset management) regulated activities.
2. General Principle 2 of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission (Code of Conduct) provide that a registered person, in conducting business activities, should act with due skill care and diligence, and in the best interests of its clients.  Paragraph 2.2 of the Code of Conduct also requires charges, mark-ups and fees affecting a client should be fair and reasonable.
3. BNP Paribas (BNPP), an authorized financial institution and registered institution, has undertaken to administer the repayment of the overcharged amounts to the affected clients.  Affected clients who wish to make enquiries may contact BNPP at (+852) 2825-1116 or (+852) 2909-8811.

Source: SFC

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