11 December 2012

UK: FSA requires action of the HSBC Group


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.

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