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CMA issues SME banking directions to HSBC

CMA has issued directions to HSBC under the SME banking undertakings 2002. The directions stem from breaches notified over the past 18 months in respect of 221 loans impacting 204 customers since 2002. They primarily concern Scots law governed loan agreements secured by Scots law floating charges.

The undertakings banks made included a ban on directly or indirectly requiring or threatening to require SMEs that had certain loans and deposits also to have BCAs.  Clauses in the relevant loans contained as a “relevant termination event” the case where HSBC ceased to be the borrower’s principal commercial bank. The CMA agreed with HSBC’s assessment of the breaches and has issued a new set of Directions, encompassing Directions already made in 2014.

Emma Radmore