UBS fined £27.6m by UK regulator for market abuse rule failings
Record penalty related to 136 million transaction reports between 2007 and 2017
Swiss bank UBS said it was pleased to resolve what it called a “legacy” issue. Photograph: Arnd Wiegmann/Reuters
Swiss bank UBS was fined a record £27.6 million by a UK regulator for failings related to 136 million transaction reports between 2007 and 2017 in what was a repeat offence.
UBS didn’t provide complete and accurate information in connection with about 87 million reportable transactions, and filed reports on another 49 million that weren’t required, the Financial Conduct Authority said in a statement on Tuesday.
“Firms must have proper systems and controls to identify what transactions they have carried out, on what markets, at what price, in what quantity and with whom,” FCA executive-director for enforcement and market oversight Mark Steward said. “If firms cannot report their transactions accurately, fundamental risks arise, including the risk that market abuse may be hidden.”
The authority had already fined UBS £100,000 in November 2005 for transaction reporting failings.
UBS said it was pleased to resolve what it called a “legacy” issue.
“Although there was never any impact on clients, investors or market users the bank has made significant investments to enhance its transaction reporting systems and controls,” the bank said in a statement. A spokeswoman said the bank is fully provisioned for the fine.
The authority fined 12 financial institutions for failures in transaction reporting between 2009 and 2015, though the UBS penalty is more than double the highest previous fine.
Under European Union securities law, banks must report transactions like stock and bond trades in a timely and accurate way so that regulators can spot any suspicious moves quickly. The regulator needs to link transactions to those involved in them to prevent market abuse.
While UBS took some steps to mitigate the situation when it recognised its problems, it could have done more, the authority found.
UBS received a maximum 30 per cent discount for agreeing to resolve the investigation, the FCA said. The wrongdoing was not “deliberate or reckless” and UBS didn’t make a profit from it, the authority said. The lender also identified 85 percent of the incorrect reports itself.
Last week, UBS, reported a €450 million boost to its litigation provisions after a French court slapped it with a €4.5 billion penalty last month on charges of illicitly soliciting cross-border clients and laundering the proceeds of tax fraud. – Bloomberg / Reuters