SFC Slaps $4 Million Fine on BNP Paribas Wealth Management
- The SFC has reprimanded and fined BNP Paribas Wealth Management for overcharging its clients.
Hong Kong’s 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.
Overcharged Clients
The SFC’s investigation found during this time period, the monetary benefits, including charges, mark-ups and fees, received by BNPPWM from around 2,300 client transactions exceeded the levels it represented in the documentation provided to the clients.
The total amount overcharged was in the region of $9.5 million with the affected transactions covering various types of investment products including Equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term, bonds, structured products, options, Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term and funds.
BNPPWM’s was in breach of the SFC’s 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.
Penalties
On top of the $4 million fine imposed by the SFC, BNPPWM has proactively co-operated with the commission in resolving the concerns. The firm has repaid all overcharged amounts received from current clients and is also in the process of repaying former clients.
This is the latest case which has seen the SFC impose hefty fines on firms who breach its code of conduct.
Morgan Stanley HK Securities was recently fined $18.5 million for breaches concerning its dealings in securities, futures contracts and provision of automated trading services, as reported by Finance Magnates.
Hong Kong’s 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.
Overcharged Clients
The SFC’s investigation found during this time period, the monetary benefits, including charges, mark-ups and fees, received by BNPPWM from around 2,300 client transactions exceeded the levels it represented in the documentation provided to the clients.
The total amount overcharged was in the region of $9.5 million with the affected transactions covering various types of investment products including Equities Equities Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling pa Read this Term, bonds, structured products, options, Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term and funds.
BNPPWM’s was in breach of the SFC’s 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.
Penalties
On top of the $4 million fine imposed by the SFC, BNPPWM has proactively co-operated with the commission in resolving the concerns. The firm has repaid all overcharged amounts received from current clients and is also in the process of repaying former clients.
This is the latest case which has seen the SFC impose hefty fines on firms who breach its code of conduct.
Morgan Stanley HK Securities was recently fined $18.5 million for breaches concerning its dealings in securities, futures contracts and provision of automated trading services, as reported by Finance Magnates.