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A subsidiary of global bank HSBC has agreed to pay more than $1 million to settle allegations it forced clients to redeem company-branded mutual fund units when it stopped doing business with dozens of independent dealers, potentially harming the clients through losses and tax consequences.
According to the settlement agreement reached Wednesday betweenHSBC Global Asset Management (Canada) Ltd. and the British Columbia Securities Commission, the market value of the required redemptions was about $21.9 million and more than 1,000 client accounts were affected.
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Rudy Luukko
Clean energy stocks had electrifying gains in 2020, as did the funds that hold them. Unfortunately, the three Canadian-listed clean energy ETFs missed out on a triple-digit year, launching just as the market became more challenging.
The Harvest Clean Energy ETF and the BMO Clean Energy Index ETF both launched in January, followed closely by the February debut of the First Trust NASDAQ Clean Edge Green Energy ETF. All three have been jolted by losses of 17% or more since inception as of March 31.
Valuations for clean energy companies had become rich, with estimated forward price-earnings ratios of more than 60 times, said Karl Cheong, head of distribution at Toronto-based FT Portfolios Canada Co., which operates as First Trust Canada. The company’s ETF is a clone of the similarly named US$2.7-billion ETF, managed by an affiliate and listed in the U.S., which returned 184% in calendar 2020 and 42.7% the year before.
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