Société Générale Private Banking Japan (SGPBJ) has been reprimanded by Japan’s Financial Services Agency (JFSA) and forced to suspend some of its private banking activities till the end of January.
The order came following a breach of laws and regulations in its trust banking operations which the JFSA said was the result of violations of laws and regulations in the private banking business, and violation of the duty of due care in the pension trust business.
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Operations suspended for up to three months
The financial regulator told SGBJ to temporarily suspended corporate client trust banking for three months from October 23 until January 22. It also instructed the French bank to halt new product and marketing activities in its private banking division between 23 October 2012 and 22 November 2012.
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By GlobalDataKey changes to be carried out
SGBJ have been advised to make six key amendments to its corporate governance framework, set out in JFSA’s statement:
1. Clarify the responsibility of the management
2. Review the governance system
3. Strengthen the functions of the audit committee and the internal audit division
4. Drastically restructure the compliance system and the customer protection management system, including the review of the management systems regarding the pension trust business and the private banking business and steady implementation of revisions.
5. Make sure that all executives and employees fully understand and comply with laws, regulations and rules, and train, retain and appropriately allocate personnel necessary for the company’s business operations.
6. Formulate a business improvement plan to implement the measures specified in (1) to (5) above and to deal with the matters pointed out in the notification of the inspection results and the order for the submission of a report, and promptly implement the plan.
SGPBJ response
In a statement on SGPBJ’s website, the French bank said that it was taking the administrative action "very seriously." It said it would ensure its clients’ interests were protected during the temporary suspension period, and was currently working actively with the JFSA, to complete a business improvement plan.
