Hong Kong's Securities and Futures Commission has reprimanded Credit Suisse (Hong Kong) Ltd and Credit Suisse AG and fined them a total of $2.8 million (US$358,723) in relation to two failures to disclose information in research reports that they issued to their private banking customers.

The SFC has reprimanded and fined the firms in accordance with ss194 and 196 Securities and Futures Ordinance. Both times, the firms reported their errors to the SFC of their own accord.

The first incident occurred on 6 October 2016, when Credit Suisse Hong Kong told the SFC that it had failed to divulge some conflicts of interest in certain research reports about securities listed in Hong Kong. Credit Suisse AG, which has published research reports prepared by Credit Suisse Hong Kong for its private banking clients, was also affected by the incident. The firms blamed technical failure.

The second disclosure occurred in or around April 2017, when Credit Suisse Hong Kong told the SFC that certain research reports that it had published might not have contained a "market-maker disclosure" that it ought to have made in accordance with paragraph 16.5(b) of the Code of Conduct for Persons Licensed by or Registered with the Securities and Futures Commission. The failure appeared to be the result of an attempt made by Credit Suisse to revise this type of disclosure for its research reports. The FCA has 'bought' Credit Suisse's contention that the exclusion was inadvertent.

Research reports in Hong Kong have to contain 'conflict disclosures' (which seems to be the SFC's jargon for them) to indicate whether:

• the subject of the report is a client of the bank that is making them;
• the bank has received investment banking revenue from the subject company in the last 12 months; and
• the bank expects to receive, or intends to seek, consideration for investment banking services from the subject company in the next three months.