HSBC ASSET MANAGEMENT (INDIA) PRIVATE LIMITED

Allegations: IN JANUARY 2018, FOLLOWING THE CONCLUSION OF THE US DEPARTMENT OF JUSTICE'S (DOJ) INVESTIGATION INTO HSBC'S HISTORICAL FOREIGN EXCHANGE ACTIVITIES, HSBC HOLDINGS ENTERED INTO A THREE-YEAR DEFERRED PROSECUTION AGREEMENT WITH THE CRIMINAL DIVISION OF THE DOJ (THE FX DPA), REGARDING FRAUDULENT CONDUCT IN CONNECTION WITH TWO PARTICULAR TRANSACTIONS IN 2010 AND 2011. IN JANUARY 2021, THE FX DPA EXPIRED AND, IN AUGUST 2021, THE CHARGES DEFERRED BY THE FX DPA WERE DISMISSED.

How it ended: Consent

Summary: IN JANUARY 2018, FOLLOWING THE CONCLUSION OF THE US DEPARTMENT OF JUSTICE'S (DOJ) INVESTIGATION INTO HSBC'S HISTORICAL FOREIGN EXCHANGE ACTIVITIES, HSBC HOLDINGS ENTERED INTO A THREE-YEAR DEFERRED PROSECUTION AGREEMENT WITH THE CRIMINAL DIVISION OF THE DOJ (THE FX DPA), REGARDING FRAUDULENT CONDUCT IN CONNECTION WITH TWO PARTICULAR TRANSACTIONS IN 2010 AND 2011. IN JANUARY 2021, THE FX DPA EXPIRED AND, IN AUGUST 2021, THE CHARGES DEFERRED BY THE FX DPA WERE DISMISSED.

Resolved: Aug 2, 2021

Allegations: IN DECEMBER 2016, THE EUROPEAN COMMISSION (THE 'COMMISSION') ISSUED A DECISION THAT IN EARLY 2007 HSBC, AMONG OTHER BANKS, COLLUDED ON EURO INTEREST RATE DERIVATIVE PRICING ELEMENTS, AND EXCHANGED RELATED SENSITIVE INFORMATION, IN BREACH OF EU ANTITRUST RULES. THE COMMISSION DETERMINED THAT THE DURATION OF HSBC'S INFRINGEMENT WAS 1 MONTH AND FINED HSBC 33,606,000 EUROS. HSBC APPEALED THE DECISION TO THE GENERAL COURT OF THE EUROPEAN UNION, WHICH IN 2019 ANNULLED THE FINE FOR FAILURE TO PROVIDE REASONS, BUT UPHELD HSBC'S LIABILITY. IN 2021 THE EUROPEAN COMMISSION IMPOSED A REVISED FINE OF 31,700,000 EUROS (USD $37,802,250 WHICH UTILIZES THE CLOSING FX RATE AS OF THE DATE OF ISSUANCE FOR THE AMENDED FINE AND AS REFLECTED IN SECTION 12.A). HSBC APPEALED TO THE LIABILITY FINDINGS TO THE COURT OF JUSTICE OF THE EUROPEAN UNION, WHICH UPHELD HSBC'S LIABILITY IN JANUARY 2023. HSBC CONTINUES TO MAINTAIN AN APPEAL BEFORE THE GENERAL COURT AGAINST THE 2021 COMMISSION DECISION IMPOSING A REVISED FINE.

Sanction: Civil and Administrative Penalt(ies) /Fine(s)

How it ended: Decision

Summary: HSBC PAID THE REVISED FINE OF 31,700,000 EUROS (USD $37,802,250 WHICH UTILIZES THE CLOSING FX RATE AS OF THE DATE OF ISSUANCE FOR THE AMENDED FINE AND AS REFLECTED IN SECTION 12.A) IN 2021. IN NOVEMBER 2024, THE GENERAL COURT DISMISSED HSBC'S APPEAL AGAINST THE FINE.

Resolved: Dec 7, 2016

Allegations: THE EUROPEAN COMMISSION IN DECEMBER 2021 COMPLETED A CARTEL INVESTIGATION INTO THE FOREIGN EXCHANGE ('FOREX') SPOT TRADING MARKET BY IMPOSING FINES ON FIVE FINANCIAL INSTITUTIONS, INCLUDING HSBC HOLDINGS PLC. THE COMMISSION'S INVESTIGATION FOCUSED ON THE TRADING OF THE G10 CURRENCIES. THE COMMISSION'S INVESTIGATION REVEALED THAT SOME TRADERS IN CHARGE OF THE FOREX SPOT TRADING OF G10 CURRENCIES, ACTING ON BEHALF OF THE FINED BANKS, EXCHANGED SENSITIVE INFORMATION AND TRADING PLANS, AND OCCASIONALLY COORDINATED THEIR TRADING STRATEGIES THROUGH AN ONLINE PROFESSIONAL CHATROOM. THE COMMISSION FOUND THAT THESE INFORMATION EXCHANGES ENABLED THE TRADERS TO MAKE INFORMED MARKET DECISIONS ON WHETHER AND WHEN TO SELL OR BUY THE CURRENCIES THEY HAD IN THEIR PORTFOLIOS, AS OPPOSED TO A SITUATION WHERE TRADERS ACTING INDEPENDENTLY FROM EACH OTHER TAKE AN INHERENT RISK IN TAKING THESE DECISIONS. OCCASIONALLY, THESE INFORMATION EXCHANGES ALSO ALLOWED THE TRADERS TO IDENTIFY OPPORTUNITIES FOR COORDINATION, FOR EXAMPLE THROUGH A PRACTICE CALLED "STANDING DOWN", WHEREBY SOME OF THEM WOULD TEMPORARILY REFRAIN FROM TRADING TO AVOID INTERFERING WITH ANOTHER TRADER. HSBC COOPERATED WITH THE INVESTIGATION AND HAS PAID THE FINE NOTED BELOW.

Sanction: Civil and Administrative Penalt(ies) /Fine(s)

How it ended: Settled

Summary: HSBC HOLDINGS CAUSED THE FINE TO BE PAID WITHIN IN THE TIMEFRAME DIRECTED BY THE COMMISSION.

Resolved: Dec 2, 2021

Allegations: THE INDIAN REGULATOR, SECURITIES & EXCHANGE BOARD OF INDIA HAD ISSUED A SHOW CAUSE NOTICE DATED 14 JUNE 2022 TO LTIML, AN ADVISORY AFFILIATE AND CERTAIN EMPLOYEES OF LTIML ALLEGING CERTAIN DEFICIENCIES AND NON-COMPLIANCES WITH RESPECT TO CERTAIN PROVISIONS OF SEBI (MUTUAL FUNDS) REGULATIONS, 1996 IN RELATION TO THE THEMATIC INSPECTION OF INTER-SCHEME TRANSFERS OF THE LTIML IN THE PERIOD FROM 01 APRIL 2017 TO 30 JUNE 2018.

Sanction: Civil and Administrative Penalt(ies) /Fine(s)

How it ended: Settled

Summary: HSBC ASSET MANAGEMENT (INDIA) PRIVATE LIMITED ACQUIRED THE ENTIRE SHARE CAPITAL OF L&T INVESTMENT MANAGEMENT LIMITED ("LTIML"), THE ASSET MANAGEMENT COMPANY OF ERSTWHILE L&T MUTUAL FUND, ON 25 NOVEMBER 2022 ("LTMF ACQUISITION"). SEBI HAD ISSUED A SHOW CAUSE NOTICE DATED 14 JUNE 2022 TO LTIML AND CERTAIN EMPLOYEES OF LTIML ALLEGING CERTAIN DEFICIENCIES AND NON-COMPLIANCES WITH RESPECT TO CERTAIN PROVISIONS OF SEBI (MUTUAL FUNDS) REGULATIONS, 1996 IN RELATION TO THE THEMATIC INSPECTION OF INTER-SCHEME TRANSFERS OF THE LTIML IN THE PERIOD FROM 01 APRIL 2017 TO 30 JUNE 2018. LTIML ALONG WITH THE SAID EMPLOYEES HAD FILED THEIR RESPONSE TO THE SHOW CAUSE NOTICE ON 21 SEPTEMBER 2022. LTIML AND THE SAID EMPLOYEES HAD ALSO FILED A SETTLEMENT APPLICATION DATED 29 JULY 2022 ON 02 AUGUST 2022 UNDER THE SEBI (SETTLEMENT PROCEEDINGS) REGULATIONS, 2018. WHICH WAS SUBSEQUENTLY REVISED ON 08 DECEMBER 2022. SEBI HAS ACCEPTED THE SETTLEMENT TERMS AND PAYMENT OF THE SETTLEMENT AMOUNT WAS MADE, WHICH WAS ABOUT USD 141,000. SUBSEQUENTLY, SEBI ISSUED THE SETTLEMENT ORDER ON 17 FEBRUARY 2023 AND DISPOSED OFF THE SHOW CAUSE NOTICE.

Resolved: Feb 17, 2023

Allegations: THE SECURITIES AND EXCHANGE BOARD OF INDIA, THE REGULATORY AUTHORITY FOR SECURITIES AND COMMODITIES MARKET IN INDIA, BY LETTER DATED APRIL 11, 2017 INFORMED HSBC SECURITIES & CAPITAL MARKETS (INDIA) PRIVATE LIMITED (HSCI) REGARDING THE INITIATION OF ADJUDICATION PROCEEDINGS UNDER SEBI ACT, 1992. THE MATTER WAS IN CONNECTION WITH ONE OF THE OPEN OFFER TRANSACTION MANAGED BY HSCI.

Sanction: Civil and Administrative Penalt(ies) /Fine(s)

How it ended: Other

Summary: THE SECURITIES AND EXCHANGE BOARD OF INDIA, THE REGULATORY AUTHORITY FOR SECURITIES AND COMMODITIES MARKET IN INDIA, BY LETTER DATED APRIL 11, 2017 INFORMED HSBC SECURITIES & CAPITAL MARKETS (INDIA) PRIVATE LIMITED (HSCI) REGARDING THE INITIATION OF ADJUDICATION PROCEEDINGS UNDER SEBI ACT, 1992. THE MATTER WAS IN CONNECTION WITH ONE OF THE OPEN OFFER TRANSACTION MANAGED BY HSCI. SEBI NOTIFIED HSCI THAT THE PROCEEDING WAS CLOSED WITHOUT ANY FINDING, PENALTY, OR OTHER ACTION BEING IMPOSED.

Resolved: Sep 3, 2025

Allegations: THE LOCAL REGULATOR, SECURITIES AND EXCHANGE BOARD OF INDIA (SEBI) ISSUED A SHOW CAUSE NOTICE DATED 04 AUGUST 2023, TO THE ADVISORY FIRM AND THE MEMBERS OF THE FUND TRUSTEES AS ON THAT DATE, (HEREINAFTER REFERRED TO AS "SAID TRUSTEES") ALLEGING VIOLATION OF REGULATION 18(9) OF THE SEBI (MUTUAL FUNDS) REGULATIONS, 1996 ("THE REGULATIONS") BY THE SAID TRUSTEES, AND VIOLATION OF CLAUSE 5 OF THE FIFTH SCHEDULE OF THE REGULATIONS AND CLAUSE 1.3.1 (C) OF SEBI CIRCULAR NO. SEBI/HO/IMD/DF2/CIR/2021/683 DATED 10 DECEMBER 2021, BY THE ADVISORY FIRM.

Sanction: Civil and Administrative Penalt(ies) /Fine(s)

How it ended: Vacated

Summary: THE ADVISORY FIRM ALONG-WITH THE SAID TRUSTEES HAVE FILED A SETTLEMENT APPLICATION DATED 05 OCTOBER 2023 UNDER THE SEBI (SETTLEMENT PROCEEDINGS) REGULATIONS, 2018 AND SEBI VIDE ITS SETTLEMENT ORDER DATED 27 MAY 2024 HAS DISPOSED OF THE ADJUDICATION PROCEEDINGS INITIATED VIDE SHOW CAUSE NOTICE DATED 04 AUGUST 2023.

Resolved: May 27, 2024

Allegations: SEBI ISSUED A SCN DATED NOV 06, 2023 UNDER SECTION 15-I(3) OF SEBI ACT, 1992 CALLING UPON AMIN TO SHOW CAUSE AS TO WHY THE AO ORDER DATED AUG 23, 2023 SHOULD NOT BE REVISED UNDER SECTION 15-I(3) OF SEBI ACT, 1992.

Sanction: Other

How it ended: Order

Summary: AMIN ACQUIRED THE ENTIRE SHARE CAPITAL OF L&T INVESTMENT MANAGEMENT LIMITED ("L&T AMC"), THE ASSET MANAGEMENT COMPANY OF ERSTWHILE L&T MUTUAL FUND, ON 25 NOVEMBER 2022 AND L&T AMC WAS SUBSEQUENTLY MERGED WITH AMIN. PURSUANT TO THE SEBI INSPECTION OF L&T AMC FOR THE PERIOD 01 APRIL 2019 TO 31 MARCH 2021, SEBI HAD ISSUED SHOW CAUSE NOTICE (SCN) DATED 20 MARCH 2023 & SUPPLEMENTARY SCN DATED JUNE 16, 2023 ALLEGING L&T AMC OF NOT COMPLYING WITH SEBI CIRCULAR NO. MFD/CIR/6/73/2000 DATED 27 JULY 2000, REGULATION 25(2) AND CLAUSE 9 OF FIFTH SCHEDULE-PART A OF SEBI (MUTUAL FUNDS) REGULATIONS, 1996. ADJUDICATING OFFICER (AO) OF SEBI VIDE ITS ORDER DATED 23 AUGUST 2023, HAD DISPOSED OF THE SAID SCNS WITHOUT IMPOSING ANY PENALTY. SUBSEQUENTLY, SEBI ISSUED A SCN DATED 06 NOV 2023 UNDER SECTION 15-I(3) OF SEBI ACT, 1992 CALLING UPON AMIN TO SHOW CAUSE AS TO WHY THE AO ORDER DATED 23 AUG 2023 SHOULD NOT BE REVISED UNDER SECTION 15-I(3) OF SEBI ACT, 1992. AMIN HAS RESPONDED TO THE SCN ON 22 DECEMBER 2023. A PERSONAL HEARING ON THE MATTER WAS HELD ON 28 FEBRUARY 2024. SEBI VIDE ITS ORDER DATED 25 JULY 2024 IMPOSED A PENALTY OF INR 5 LAKHS ON AMIN. AMIN PAID THE PENALTY TO SEBI ON 1 AUGUST 2024.

Resolved: Jul 25, 2024

Allegations: SEBI HAS ISSUED A SHOW CAUSE NOTICE DATED JANUARY 4, 2024, UNDER RULE 4 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES) RULES, 1995 TO ONE OF THE KEY EMPLOYEES OF THE AMC IN A MATTER PERTAINING TO HIS PAST EMPLOYER AND ALONG WITH OTHERS, ALLEGING VIOLATION OF SEBI REGULATIONS.

Sanction: Civil and Administrative Penalt(ies) /Fine(s)

How it ended: Consent

Summary: SEBI HAS ISSUED A SHOW CAUSE NOTICE DATED JANUARY 4, 2024, UNDER RULE 4 OF SEBI (PROCEDURE FOR HOLDING INQUIRY AND IMPOSING PENALTIES) RULES, 1995 TO ONE OF THE KEY EMPLOYEES OF THE AMC IN A MATTER PERTAINING TO HIS PAST EMPLOYER AND ALONG WITH OTHERS, ALLEGING VIOLATION OF SEBI REGULATIONS. THE SAID KEY EMPLOYEE HAS FILED A SETTLEMENT APPLICATION WITH SEBI UNDER THE SEBI (SETTLEMENT PROCEEDINGS) REGULATIONS, 2018. SEBI VIDE ITS SETTLEMENT ORDER DATED OCTOBER 22, 2024 DISPOSED OF THE MATTER UPON PAYMENT OF SETTLEMENT CHARGES OF USD 23,193.36 BY THE KEY EMPLOYEE.

Allegations: IN MAY 2023 THE COMPETITION AND MARKETS AUTHORITY ISSUED A STATEMENT OF OBJECTIONS TO FIVE BANKS (DEUTSCHE BANK, MORGAN STANLEY, ROYAL BANK OF CANADA, CITI, AND HSBC). IN FEBRUARY 2025, THE COMPETITION AND MARKETS AUTHORITY ANNOUNCED THAT IT HAD REACHED A SETTLEMENT WITH HSBC. HSBC ACCEPTED THAT A SINGLE HSBC TRADER HAD SHARED COMPETITIVELY SENSITIVE INFORMATION ON 12 SEPARATE OCCASIONS WITH A DEUTSCHE BANK TRADER IN A ONE-TO-ONE CHATROOM FROM OCTOBER 2009 TO JULY 2010. THE INFORMATION CONCERNED THE ISSUING AND TRADING OF GILTS.

Sanction: Civil and Administrative Penalt(ies) /Fine(s)

How it ended: Settled

Summary: IN FEBRUARY 2025, HSBC HOLDINGS (AS PARENT) AND HSBC BANK PLC ACCEPTED THAT A SINGLE HSBC BANK PLC TRADER HAD SHARED COMPETITVELY-SENSITIVE INFORMATION WITH DEUTSCHE BANK ON 12 OCCASSIONS OVER 2009-2010. HSBC HAS AGREED TO PAY A FINE OF GBP £23.4M (APPROX USD $30M). No Information Filed

Resolved: Feb 21, 2025