A spokesperson for HSBC told WealthBriefingAsia: "We seek to comply with local regulation and laws in the jurisdictions in which we operate. The case has been settled, and we have no further comment on the matter."

The watchdog had started to investigate the complaint spanning a period from 18 June, 2004, through to 28 September, 2011, to see if there were any breaches of portfolio management rules and a code of conduct affecting how mutual funds should be managed. HSBC had stated, the SEBI statement said, that it had not acted as portfolio manager but is a registered Association of Mutual Funds India distributor.

The complaint had been registered by the woman as a client of HSBC’s retail banking and wealth management services, the statement said.

The regulator’s investigation revealed that there was “excessive churning” in the portfolio of the complainant. “The complainant’s money had been invested in 38 different schemes of various mutual funds. Some of the investments were not in line with the risk profile of the complainant,” it said.

“It has also been seen that a large number of the investments made in mutual fund schemes were redeemed in a short span of time and on many instances redemption proceeds were used to invest in similar mutual fund schemes,” it said.

In reply, HSBC said it hadn’t made investments on the client’s behalf and followed the client’s instructions; transactions made by HSBC were done in its “capacity as a mutual fund distributor and not as a portfolio manager”.

“Profiling of a client is based on standard questions put to them based on templated formats. This is merely a subjective assessment and cannot be basis of all investment decisions of the client,” HSBC had said in its notice, as stated by the regulator, on 10 December, 2013.