It comes as the bank said it would spend an initial $700m improving its money laundering safeguards.
The FSA said HSBC must establish a committee of the HSBC Board with a mandate to oversee matters relating to anti-money laundering, sanctions, terrorist financing and proliferation financing.
It must review relevant group policies and procedures to ensure that all parts of the HSBC group are subject to standards equivalent to those required under UK requirements.
It will also need to appoint a group money laundering reporting officer who will be an FSA approved person, with responsibility for ensuring that systems and controls are in place across the group, to ensure the group is in compliance with all relevant legal and regulatory requirements.
An independent monitor will need to be appointed to oversee the group’s compliance with UK anti-money laundering, sanctions, terrorist financing and proliferation financing requirements and to provide independent reporting to the HSBC Board committee and regulators.
Earlier this week, HSBC and Standard Chartered agreed record settlements over money laundering allegations, with the former agreeing to pay $1.9bn to US regulators.
HSBC had been alleged to have helped launder money belonging to drug cartels and countries under US sanctions.
