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In a settlement agreement with the British Columbia Securities Commission (BCSC), HSBC Investment Funds (Canada) Inc. (HIFC) and HSBC Private Wealth Services (Canada) Inc. (HPWS) have agreed they charged excess fees in some client accounts.
HIFC has a policy to advise clients when their account holdings in an HSBC Mutual Fund qualify for the lower priced Premium Series investment funds. Due to inadequate controls and supervision, it did not apply this policy consistently, which resulted in some clients paying extra fees.
HPWS has a policy to exclude client controlled securities when calculating advisory fees on client accounts. It did not apply this policy consistently, which resulted in a small number of clients paying extra fees.
The agreement notes that HIFC and HPWS cooperated fully with BCSC staff over the course of their review and were quick to implement a compensation plan. To address the failures, HIFC has compensated 4,651 client accounts for a total of $7,076,651.35, and HPWS has compensated 10 client accounts for a total of $10,100.84.
HIFC and HPWS have paid the BCSC $300,000 in respect of the settlement of this matter, and $20,000 in respect of costs.
You may view the settlement agreement on our website www.bcsc.bc.ca by typing HSBC Investment Funds (Canada) Inc., HSBC Private Wealth Services (Canada) Inc. or 2016 BCSECCOM 185 in the search box. Information regarding disciplinary proceedings can be found in the Enforcement section of the BCSC website.
Please visit the Canadian Securities Administrators' Disciplined List for information relating to persons or companies disciplined by provincial securities regulators, the Investment Industry Regulatory Organization of Canada (IIROC) and the Mutual Fund Dealers Association (MFDA).
