FSA requires action of the HSBC Group

Documents First published: Last updated: 15/08/2014

The Financial Services Authority (FSA), as lead regulator for the HSBC Group globally, is taking action in relation to issues in respect of HSBC’s compliance with anti-money laundering rules and US sanctions requirements.

FSA/PN/111/2012
11 Dec 2012

The Financial Services Authority (FSA), as lead regulator for the HSBC Group globally, is taking action in relation to issues in respect of HSBC’s compliance with anti-money laundering rules and US sanctions requirements.

The FSA has worked closely with the relevant US authorities and this action is separate to, but coordinated with the actions taken by them.

The FSA has made a number of requirements of HSBC Holdings plc which are designed to ensure that all parts of the HSBC Group are in compliance with the relevant legal and regulatory requirements across the Group to prevent similar failings occurring in the future. The FSA requires HSBC Holdings to:

  • Establish a committee of the HSBC Board with a mandate to oversee matters relating to anti-money laundering, sanctions, terrorist financing and proliferation financing;
  • Review relevant Group policies and procedures to ensure that all parts of the HSBC Group are subject to standards equivalent to those required under UK requirements;
  • Appoint a Group Money Laundering Reporting Officer (MLRO) who will be an FSA approved person, with responsibility for ensuring that systems and controls are in place across the Group, to ensure the Group is in compliance with all relevant legal and regulatory requirements; and
  • Employ an independent monitor to oversee the Group’s compliance with UK anti-money laundering, sanctions, terrorist financing and proliferation financing requirements and to provide independent reporting to the HSBC Board committee and regulators.

Through its supervision, the FSA will take steps to ensure that HSBC complies with these measures.

These measures are in addition to the requirements of the Cease and Desist order issued by the Federal Reserve Board and the Deferred Prosecution Agreement issued by the US Department of Justice on 11 December 2012.

Notes for editors

  1. The following US authorities have taken action against HSBC: Department of Justice (DoJ); District Attorney of New York (DANY); The Office of Foreign Assets Control (OFAC); Financial Crimes Enforcement Network (FinCEN); Federal Reserve Board; Office of the Comptroller of the Currency (OCC)
  2. HSBC Holdings is a public limited company incorporated in England and Wales. HSBC Holdings plc does not undertake regulated activities in the UK and is therefore not an FSA authorised person. A number of discrete legal entities, each partly or wholly owned by HSBC Holdings form the HSBC Group. The HSBC Group operates in five regions; Europe, North America, Latin America, Middle East and Asia Pacific, and provides a range of financial services to clients in these regions.
  3. The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; securing the appropriate degree of protection for consumers; fighting financial crime; and contributing to the protection and enhancement of the stability of the UK financial system.
  4. The FSA will be replaced by the Financial Conduct Authority and Prudential Regulation Authority in 2013. The Financial Services Bill currently undergoing parliamentary scrutiny is expected to receive Royal Assent in late 2012 or early 2013, subject to the parliamentary timetable.