HSBC clients Will Have to Follow RBC Rules, Regulations once Deal closed, Says Expert
An economic expert on Thursday said that HSBC clients will have to follow the RBC rules and regulations regarding their local and international transactions after the latter completes its purchase of HSBC’s Canadian unit for CAD $13 billion.
After more than four decades of doing business in Canada, HSBC is calling it quits, extending its retreat from markets around the world deemed peripheral to its strategy of serving international clients and businesses.
“There are several factors behind the such acquisition, but the most important thing is the fines imposed by the Financial Services Commission of Ontario (FSCO) on HSBC”, George Ismail told Media in Toronto.
“The clients will have to follow the rules and regulations of RBC once the deal is completed. HSBC Canada customers have plenty of time to weigh their options as the deal isn’t expected to close until late 2023,” he said, noting that the deal needs approval from the Competition Bureau, the Office of the Superintendent of Financial Institutions, and the federal Finance Minister.
On the other hand, environmental law charity Ecojustice, representing Stand.earth, submitted a letter to Canadian Minister of Finance Chrystia Freeland opposing the Royal Bank of Canada (RBC)’s bid to purchase HSBC’s Canadian unit for CAD $13 billion, unless there are conditions to restrict greenwashing and manage climate change risks.
Copies have been sent to Canada’s Competition Bureau, a federal law enforcement agency, financial regulatory body the Office of the Superintendent of Financial Institutions (OSFI), two primary UK regulators, and the federal Minister of Environment and Climate Change Steven Guilbeault.
The letter states: “Unfortunately, neither RBC nor HSBC has a credible plan for addressing climate change (a major systemic financial risk) and the misleading nature of their public climate commitments contrasted with their fossil fuel financing brings the integrity of their operations into question. Misleading consumers and making false climate promises while financing the primary driver of climate change is not in the best interests of Canadians or the financial system.
“Canada needs all economic actors to align with the goal of limiting warming to 1.5°C to reduce climate risks to the financial system and meet Canada’s domestic and international climate commitments. Greenwashing undermines the actions of institutions who are legitimately committed to and aligned with achieving net zero.”