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Hong Kong regulators looking into possible overcharging by brokers

HONG KONG Hong Kong’s financial regulators announced on Monday that they would analyze the charges imposed by brokers during trading for clients, including potential overcharging.

The Securities and Futures Commission (SFC) and Hong Kong Monetary Authority (HKMA) will use the results of the analysis to measure the compliance of the financial institutions and to charge penalties if the rules are broken.

The plan is to find out whether intermediaries have been demanding greater fees than they informed clients to trade on their behalf. The regulators stated that the review will begin in the second half of the year.

The SFC typically carries out such confined reviews when it identifies trends, emerging risks, or compliance oversight that requires a regulatory response. In 2018 a review was published regarding the activities of investment banks when sponsoring or leading IPOs, and in 2019 banned UBS from sponsoring IPOs for 10 months and imposed penalties worth $100 million on it along with Wall Street for due diligence shortcomings.