[ad_1]
Deutsche Bank will not be able to support Hong Kong’s initial public offering from July after failing to replace the two employees regulated by the German lender in time after the company agreed to restart its Asian stock business.
The error means that the license of the sponsoring IPO of the regional capital markets division of Deutsche Securities Asia will expire from next month, as confirmed by a person familiar with the matter and the lender.
A person close to the Securities and Futures Commission, Hong Kong’s financial regulator, said the issue suggested that there were “poor internal controls” in Deutsche because the bank would have to replace the two main employees and get SFC approval. It could be a slow process.
Hong Kong banks must uphold the two main principles regulated by the IPO in order to be authorized as a sponsor.
German lender plans to rebuild its capital markets division by hiring in Asia-Pacific this year, however closing a large part of the business in 2019. Deutsche restructured its stock research and IPO unit as part of plans to cut 18,000 jobs worldwide and drastically reduce its investment banking. The company threw out almost all of its capital market groups in Hong Kong.
Deutsche has described the IPO licensing issue as an “inappropriate imbalance” and has said it has already hired replacements, although it has declined to say when the banks will start. The lender is still able to hire IPOs until the sponsor’s license is renewed. This means that the mobile company can market shares, a role that has less profit and less prestige than a sponsor.
According to the SFC record, until June Deutsche’s IPO directors were investment bankers Poon Tsz Yuen and Rowena Wang. Wang left the bank on June 16, and Poon is ready to be removed from the records of the authorized major in early July, according to a person who knew the subject. Deutsche confirmed the departures.
The bank’s plan to rebuild its equity business has been driven in part by a chain blockbuster IPOs and strong trading volumes in Hong Kong this year. The city has also seen an increase in the acquisition of special targets in companies or white check vehicles, many of which are aimed at companies in the region.
A senior official at the Hong Kong-based Deutsche Company appeared unbelievable when asked about the status of the license. He said it would be “crazy” for a global bank to expire its IPO license with large legal and compliance departments and not have a plan to replace the two authorized people.
City regulators must nominate a sponsor to companies at least two months before submitting them to the list. Deutsche last year was a sponsor of HK $ 1.3 million ($ 170 million) from Hent Congo Greentown Management (a property management business).
By default, SFC last week fined Deutsche Securities Asia HK 2.45 million euros “for misrepresenting its main brokerage clients” and for “delaying reporting of failures to SFC.”
[ad_2]
Source link
