J.P. Morgan Securities (Asia Pacific) (JPMSAP) and JPMorgan Chase Bank, National Association (JPMCB) has been fined HKD5.6m ($721,798.78) by Hong Kong’s Securities and Futures Commission (SFC) for regulatory violations.
The regulator alleged JPMSAP of failing to disclose JP Morgan’s financial interests regarding listed issuers covered in its research reports.
The disclosure failures were caused due to deficiencies in JP Morgan’s global securities position reporting system.
In the US, the bank became aware of the deficiencies in October 2013 and brought it to the notice of JPMSAP in January the following year. However, JPMSAP failed to implement sufficient controls to ensure compliance with the disclosure requirements, the regulator noted.
“During the sample year 2013, JPMSAP was required to disclose its financial interests of more than 1% in four listed issuers in 33 research reports, but it failed to do so in 30 of these reports,” the regulator said.
SFC also alleged that JPMCB offered certain offshore listed index options to its clients without the required licences from April 2003 to July 2015.
The two entities did not report the breaches to the watchdog in time.