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HONG KONG—Hong Kong's securities regulator, boosting oversight of the world's top market for initial public offerings, is cracking down on Western investment banks over some listings.

According to people familiar with the matter, they include those of China Forestry Holdings Co., underwritten by UBS Group AG and Standard Chartered PLC, and China Metal Recycling (Holdings) Ltd., underwritten by UBS. The two companies, whose 2009 IPOs raised a combined total of more than US$400 million, were put in liquidation after regulators found evidence of fraudulent accounting.

Both banks have said Hong Kong's Securities and Futures Commission plans action against them over IPOs. Spokesmen for the banks declined to comment beyond their statements. The regulator confirmed the investigations but declined to comment further.

Standard Chartered scrapped its equities business last year.

Bankers and lawyers in the Asian financial hub say that more investigations and regulatory actions could be on the way.

Hong Kong is the world's No. 1 market for IPOs this year, raising $21.2 billion to top New York. IPOs of Chinese companies seeking global investors have long been the lifeblood of the city's bustling financial scene.

While Hong Kong's securities regulator in the past has taken on cases against local brokers and mainland Chinese firms operating in Hong Kong, it has rarely probed the IPO work of big Western investment banks. However, in recent years, investors have been stung by a string of high-profile failures of recently listed companies that carried the imprimatur of Western underwriters.

Hong Kong's securities regulator "has become more willing to take action against the big-name banks than they were in the past," said Robert Cleaver, a partner at law firm Linklaters LLP. "They have to make an example of a few people if they want to be effective."

He said the new approach is a product of underwriting rules implemented in 2013, which could make investment banks and bankers criminally responsible for false information in the prospectuses of companies they take public—raising the bar for work on such deals. The regulator has also bulked up on enforcement staff, and in March hired Thomas Atkinson, a former Canadian securities enforcement official, to lead its enforcement division.

Investment banks themselves are stepping up their efforts, as well, hiring due-diligence firms to verify company claims and building out compliance teams.

China Forestry Holdings Co., a forestry-plantation operator in China, became embroiled in scandal when its auditor found accounting irregularities and its former chief executive was arrested in 2011 by Chinese authorities for alleged embezzlement. The company's Hong Kong liquidators are now suing Standard Chartered, UBS, and other firms that worked on the company's IPO.

China Metal Recycling—the country's self-proclaimed biggest scrap-metal recycler by revenue—fell under the scrutiny of short seller Glaucus Research Group California LLC, which said in a 2013 report that it had inflated revenue. After an investigation, Hong Kong's securities regulator found that the company's IPO prospectus had "overstated its financial position" and sought its liquidation.

China Forestry is in the process of being delisted, while China Metal Recycling was delisted in February, according to exchange filings.

Write to Alec Macfarlane at Alec.Macfarlane@wsj.com, Kane Wu at Kane.Wu@wsj.com and Julie Steinberg at julie.steinberg@wsj.com

(END) Dow Jones Newswires

November 03, 2016 10:15 ET (14:15 GMT)

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