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March 20, 2019

FCA imposes penalty of £27.6m on UBS for reporting lapses

The UK’s Financial Conduct Authority (FCA) has slapped Swiss private banking giant UBS with a £27.6m ($36.61m) fine for misreporting millions of transactions.

The UK’s financial services watchdog alleged that UBS misreported more than 136 million transactions between 2007 and 2017.

The Swiss bank failed to provide ‘complete and accurate information’ in relation to approximately 86.67 million reportable transactions and unnecessarily reported 49.1 million transactions, the FCA said in a statement.

“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. If firms cannot report their transactions accurately, fundamental risks arise, including the risk that market abuse may be hidden,” the statement read.

The financial watchdog alleged that UBS failed to take ‘reasonable care’ to manage its affairs effectively in respect of its transaction reporting.

The regulator found flaws in UBS’ change management processes and its maintenance of the reference data used in its reporting.

Lapses were also observed in process followed by the bank to test whether all the transactions it reported to the FCA were accurate and complete.

The FCA gave UBS a 30% discount for agreeing to resolve the investigation. Without this discount, the financial penalty would have been £39.42m.

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