Most Hong Kong banks say they have no plans to withdraw from the wealth management business even though the new rules that become effective this week will increase costs and erode profit margins.
HSBC Holdings, Hang Seng Bank, DBS Bank (Hong Kong) and ICBC (Asia) said they had already started recording sales process with audio devices at branches covering investment products ahead of the implementation date set by the Hong Kong Monetary Authority.
William Leung Wing-cheung, a general manager at Hang Seng, said the bank had started audio recording of sales in the middle of March and found the process smooth.
'It could provide better protection to customers,' Mr Leung said, adding that having such a record could avoid potential disputes between banks and their customers after product sales.
The HKMA asked banks to separate their wealth management businesses from traditional banking activities by October 1 and record sales activities with customers by Wednesday.
The measures are part of a series of proposals suggested in separate reports by the HKMA and the Securities and Futures Commission on last year's Lehman Brothers-linked minibond sales fiasco.
Minibonds are not corporate bonds but consist of high-risk credit-linked derivatives.
