UBS was fined by the regulator in Hong Kong for mistakes committed as joint sponsor of several initial public offerings. The regulator also issued a partial ban on the bank to act as an IPO sponsor.

The Securities and Futures Commission (SFC) of Hong Kong fined UBS a total of $375 million over its failures to discharge obligations in IPO listing applications, according to a statement released on Thursday. The listings concerned involved China Forestry, Tianhe Chemicals and one other unidentified listing application.

In its ruling, SFC also fined Standard Chartered, Merrill Lynch and Morgan Stanley. Standard Chartered was fined $59.7 million for failing to discharge its obligations as one of the joint sponsors in relation to China Forestry's listing application in 2009. The regulatory body said Standard Chartered had failed to make reasonable due diligence inquiries in relation to several core aspects of the firm's business.

Partial Suspension

The SFC also partially suspended UBS Securities' Hong Kong license to advise on corporate finance for one year, to the extent that it shall not act as a sponsor for listing application on the Stock Exchange of Hong Kong of any securities. This means UBS can still underwrite IPOs in the territory.

The Hong Kong regulator also suspended the license of Cen Tian, a Hong Kong-based managing director at UBS, for two years from March 14, 2019 to March 13, 2021, for failing to discharge his supervisory duties as a sponsor principal for China Forestry’s listing application.

UBS said it has taken note of the findings, adding it was «pleased to have resolved these legacy issues relating to our Hong Kong IPO sponsorship license».

Tianhe Chemicals Listing

Separately, Morgan Stanley and Merrill Lynch were fined $224 million and $128 million respectively for failing to discharge their obligations as joint sponsors in relation to the listing application of Tianhe Chemicals in 2014. SFC said its investigations revealed that the two banks failed to follow the specific guidelines on due diligence interviews.