Bank stops con­flict of in­ter­est trade

The Star Early Edition - - COMPANIES -

HSBC Hold­ings has in­structed about 6 000 em­ploy­ees of its global mar­kets divi­sion to cease buy­ing sin­gle-name se­cu­ri­ties on their per­sonal ac­counts, ac­cord­ing to sources with knowl­edge of the mat­ter. Pur­chases of sin­gle-name stocks, bonds and con­cen­trated ex­change-traded funds would be pro­hib­ited, global head of mar­kets Thibaut de Roux told staff in an e-mail on Fri­day, said the sources who asked not to be iden­ti­fied dis­cussing in­ter­nal com­mu­ni­ca­tions. The changes also ap­ply to em­ploy­ees man­ag­ing the lender’s own bal­ance sheet, the sources said. A Lon­don-based spokesper­son for the bank de­clined to com­ment. Em­ploy­ees would be al­lowed to main­tain ex­ist­ing hold­ings of se­cu­ri­ties pro­hib­ited by the new rules, while any sales must be pre-ap­proved by com­pli­ance per­son­nel, staff were told. Man­agers had been in­structed to be vig­i­lant in such ap­provals and de­cline re­quests if nec­es­sary, the sources said. HSBC would not be the first big bank to toughen a pol­icy ad­dress­ing con­flicts of in­ter­est. Gold­man Sachs Group barred in­vest­ment bankers from trad­ing in­di­vid­ual stocks and bonds in 2014. By con­trast JP­Mor­gan Chase al­lows traders to deal for their per­sonal gain through ap­proved bro­kers. It bans “spec­u­la­tive and other short-term in­vest­ment ac­tiv­ity” or pur­chas­ing the se­cu­ri­ties of a client, ac­cord­ing to a 2016 rule book. A spokesper­son de­clined to com­ment. Bar­clays em­ploy­ees are al­lowed to trade sin­gle-name se­cu­ri­ties, though the bank’s pol­icy is cur­rently un­der re­view. – Bloomberg

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