HSBC fined record US$3 million for use of ‘unauthorised’ agents in MPF recruitment scheme

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Breach of rules ‘strikes at the heart of the regulatory regime’, says MPFA, the Hong Kong pensions watchdog

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‘The MPFA concluded that HSBC did not comply with the conduct requirements under the Mandatory Provident Fund Schemes Ordinance,” it said in a statement. Photo: SCMP Pictures

Enoch Yiu

Published: 8:11pm, 5 Jul 2024

HSBC, Hong Kong’s biggest lender, has been hit with a record fine of HK$24 million (US$3 million) by the pensions regulator for offering incentives to “unauthorised intermediaries” to get corporate clients to join its Mandatory Provident Fund (MPF) scheme in 2020 and 2021.

The Mandatory Provident Fund Schemes Authority (MPFA) said it has reprimanded and disqualified the lender’s former head of pensions, Alfred Yip Sze-ki, from taking a senior executive role at any MPF operator for 18 months.

“The MPFA concluded that HSBC did not comply with the conduct requirements under the Mandatory Provident Fund Schemes Ordinance,” it said in a statement on Friday.

The watchdog said the penalty showed “the need to send a strong deterrent message to the industry that such non-compliance is not acceptable.”

HSBC and its subsidiary Hang Seng Bank are together the second-largest MPF provider in the city with a combined market share of 23.3 per cent, behind Manulife on 27.9 per cent, according to data from GUM, a pensions consultant.

The MPFA said it has reprimanded and disqualified the lender’s former head of pensions, Alfred Yip Sze-ki, pictured, from working for any MPF operator for 18 months. Photo: K. Y. Cheng