HKMA Steps Up Scrutiny Of Banks

• Published date: 15 September 2022
• Subject Matter: Finance and Banking, Government, Public Sector, Financial Services, Fiscal & Monetary Policy
• Law Firm: FTI Consulting
• Author: Mr Aditya Chopra

It's interesting to see HKMA back in action and more active post-COVID. The recent enforcement actions on various financial institutions (FIs) are clear indicators of things to come and increased scrutiny by the HKMA, which was much needed and one of the potential takeaways from the last criticisms of the FATF mutual evaluation of Hong Kong.

Commerzbank contraventions are a basket case of issues faced mainly by small branches of global FIs. It highlights the need for consistency and well-defined FCC policies and procedures, governance, and practical implementation.

In the statement of the disciplinary action on Commerzbank, HKMA noted that it:

• failed to carry out the required CDD measures on 17 customers before establishing the relationship. Delays in carrying out such measures ranged from two to 46 months.
• did not terminate the business relationships with 12 customers for periods ranging from six to 46 months.
• failed to establish and maintain adequate...