Failure to Disclose Notifiable Interests in HK Listed Shares

As announced on 15 Jun 2016, SFC reprimanded and fined Schroder Investment Management (Hong Kong) Limited $1.8 million for failing to disclose all notifiable interests in Hong Kong listed shares.

From Aug 2005 to Jan 2013, Schroder failed to disclose to SEHK and the relevant listed companies all notifiable interests in Hong Kong listed shares held in client portfolios and managed by Schroders plc and certain of its subsidiaries (Schroder Entities) where they did not have or were unable to exercise proxy voting rights. Schroder is responsible for preparing and filing the notices disclosing all notifiable interests in Hong Kong listed shares for the Schroder Entities to SEHK and the relevant listed companies.

Although legal advice obtained by Schroder advised that an "interest" in shares was broadly defined and was not confined to the exercise of a voting right, Schroder failed to properly follow the advice.

According to Schroder, it discovered the disclosure failures in Nov 2012 when it was preparing to implement a new global system for the monitoring and reporting of disclosable interests in shares. In Feb and Mar 2013, Schroder filed a total of 236 substantial shareholders notices to the SEHK to correct the disclosure notices filed for the Schroder Entities from Jul 2010 to Jan 2013.

I am wondering who in Schroder made the decision of disregarding the legal advice.