Deutsche Bank AG (NYSE: DB), Lack Of Staff A Temporary Setback

Deutsche Bank AG is expected to lose the ability to sponsor IPO (Initial Public Offerings) in Hong Kong, starting July, as the bank doesn’t have enough licensed bankers for the time being.

Failed to fill the vacancy: The bank’s inability to replace the position of the two licensed bankers, who were serving as a principal officer for IPO. As per the regulations, the financial institution without an IPO principal will cease to sponsor any IPO. As per the city’s Securities and Futures Commission (SFC), brokerage firm or banks who act as a sponsor, needs to have minimum two licensed bankers as IPO Principals, and they need to be approved by (SFC)

As per the regulation, financial institutions, who act as sponsors, take charge from the front in an IPO (Initial Public Offering) in Hong Kong, starting from due diligence on the companies that intend to go public and advise them throughout the listing process. As per Deutsche Bank, this is a temporary setback, and the banks have found the replacement to the outgoing principals who will resume the work shortly, as per the various media reports. Till then, the company can act as an underwriter and not the sponsor to the offerings. In Hong Kong, the banker who acts as a sponsor gets a large portion of the fees as compared to the institutions that act only as book-runners.

Scaled-down business: Deutsche Bank had scaled down its business globally in 2019 but kept operations open in Singapore for the Asia Pacific Capital market. In the last week, to provide an incorrect statement to its clients and delay reporting the information to the regulator, the Securities and Futures Commission fined the bank HK$2.45 million.

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