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FSA/PN/137/2005
14 December 2005

The Financial Services Authority (FSA) has today fined HSBC Bank plc (HSBC) £100,000 for failing to take reasonable steps to ensure the accuracy of transaction reports it made to the FSA from December 2002 until August 2005.

In July 2005 the FSA requested certain trading information from HSBC Stockbroker Services (HSS) which, when reviewed, revealed that HSS had reported the client transaction as a "sale" prior to a positive announcement and a "purchase" after it.

Following discussions between the FSA and HSBC it emerged that transaction reports being made through HSS had been inaccurately representing client purchases as client sales and vice versa.

The FSA relies on firms to provide accurate transaction reports to enable it to monitor the market effectively and failing to do so could affect the FSA's ability to maintain confidence in the financial markets and reduce financial crime.

HSBC has taken the necessary remedial steps to improve its systems and controls in this area and has co-operated fully with the FSA's investigation into this matter.

Notes for editors

  1. The full text of the Final Notice is available on the FSA website. This includes the background to the case, the relevant statutory provisions, and the regulatory requirements contravened.
  2. The FSA has previously fined Bear Stearns £40,000 and UBS £100,000 for transaction reporting failings.
  3. This case was settled under the FSA's Executive Settlement Scheme.
  4. Financial penalties are not treated as income by the FSA. They are applied for the benefit of authorised persons (or the issuers of securities admitted to the official list) as appropriate, and so given back to the industry in subsequent years.
  5. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; the appropriate degree of protection for consumers; and fighting financial crime.
  6. The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.