British lender HSBC has been banned from taking on new funds in its asset management business in Saudi Arabia by financial regulator Capital Markets Authority (CMA), Bloomberg reported quoting unidentified sources. The order, which was made late last year, came after the regulator found the bank guilty of breaching local regulations. HSBC Saudi Arabia needs to revamp its compliance procedures in order for the CMA to reverse the ban, sources reportedly said. CMA’s action is also unrelated to investigations launched by other regulators into HSBC’s operations, they added. The ban is expected to impact HSBC’s $7 billion asset management business in the Kingdom. The move also comes as Saudi is preparing to open its stock market to foreign investors by June. Bourse regulators across as the Gulf are tightening controls as they look to improve transparency and corporate governance to attract more investments. Recently, Dubai Financial Services Authority- the emirate’s financial free zone regulator- penalised the German lender Deutsche Bank after it noted “serious contraventions” in the bank’s wealth management business. Deutsche Bank, which was fined $8.4 million, also sought to deliberately mislead DFSA over its actions.
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