2 Minute Read by Reuters Staff Reuters, HONG KONG, June 30 – According to a person with firsthand knowledge of the situation, Deutsche Bank will be unable to sponsor initial public offers (IPOs) in Hong Kong starting in July due to a temporary shortage of licensed bankers. The bank’s license was halted after two of its IPO principals left, according to the source, who added that the license should be reissued after those two people are replaced. Because the information, which was initially reported by the Financial Times, was not yet public, the person declined to be identified. A request for comment from Deutsche Bank was not immediately returned. The Securities and Futures Commission (SFC), the city’s regulator, declined to comment on Deutsche’s license suspension. In 2019, Deutsche Bank reduced its worldwide equities business, but preserved a tiny equities capital market (ECM) presence in Asia, mostly in Singapore. According to local media sources, the bank recently employed some staff in its ECM section. According to Refinitiv statistics, Deutsche did not rank among the top 25 banks in the Asia Pacific equities capital markets for the first half. In Hong Kong, all initial public offerings (IPOs) require at least one sponsoring bank, which often takes the lead in the IPO and gets a higher percentage of fees than banks listed just as bookrunners. The SFC penalized Deutsche HK$2.45 million ($316,000) last Monday for giving false representations to its prime brokerage clients for a period of 12 years and failing to report the problem to the regulator. (1 Hong Kong dollar = 7.7653 Hong Kong dollars) Scott Murdoch and Alun John reported from Hong Kong, while Kenneth Maxwell edited the piece. Continue reading
