FCA dishes out £5.62 million fine to RBS
25 July 2013 London
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The Royal Bank of Scotland has been fined £5.62 million by the Financial Conduct Authority (FCA) for incorrectly reporting transactions it made in wholesale markets, and in some instances, failing to report transactions at all.
RBS failed to properly report 44.8 million transactions between November 2007 and February 2013, and failed altogether to report 804,000 transactions between November 2007 and February 2012.
This represents 37 percent of relevant transactions carried out by RBS in this period, and breaches FCA rules on transaction reporting and its requirements for firms to have adequate management and controls.
“Many of the problems with RBS’ own systems were compounded by the takeover of ABN Amro Bank N.V. in October 2007,” said the FCA in a statement. “The FCA considers that, given the considerable resources available to RBS, it should have been able to overcome these challenges and ensure adequate systems and controls were in place.”
Tracey McDermott, the FCA’s director of enforcement and financial crime, said: "Effective market surveillance depends on accurate and timely reporting of transactions. We have set out clear guidance on transaction reporting, backed up by extensive market monitoring, and we expect firms to get it right."
"As well as a financial penalty, firms can expect to incur the cost of resubmitting historically incorrect reports. We will continue to take appropriate action against any firm that fails to meet our requirements."
The FCA’s overall objective is to ensure that markets function well, and accurate and complete transaction reporting by firms is an essential tool in delivering this objective, continued the statement.
"The FCA uses these reports in a number of ways—including identifying and investigating suspected market abuse, for example insider trading and market manipulation. Where the FCA sees any evidence of firms not acting properly it will not hesitate to act."
The failures are particularly concerning, said the FCA, given that it already provides extensive guidance to firms on how to submit and check these reports, and has taken action against seven firms, including Barclays and Credit Suisse, for similar reporting errors.
“The size of the fine reflects the serious nature of the issue,” it concluded. RBS agreed to settle at an early stage of the investigation, and received a 30 percent reduction of its fine.
RBS failed to properly report 44.8 million transactions between November 2007 and February 2013, and failed altogether to report 804,000 transactions between November 2007 and February 2012.
This represents 37 percent of relevant transactions carried out by RBS in this period, and breaches FCA rules on transaction reporting and its requirements for firms to have adequate management and controls.
“Many of the problems with RBS’ own systems were compounded by the takeover of ABN Amro Bank N.V. in October 2007,” said the FCA in a statement. “The FCA considers that, given the considerable resources available to RBS, it should have been able to overcome these challenges and ensure adequate systems and controls were in place.”
Tracey McDermott, the FCA’s director of enforcement and financial crime, said: "Effective market surveillance depends on accurate and timely reporting of transactions. We have set out clear guidance on transaction reporting, backed up by extensive market monitoring, and we expect firms to get it right."
"As well as a financial penalty, firms can expect to incur the cost of resubmitting historically incorrect reports. We will continue to take appropriate action against any firm that fails to meet our requirements."
The FCA’s overall objective is to ensure that markets function well, and accurate and complete transaction reporting by firms is an essential tool in delivering this objective, continued the statement.
"The FCA uses these reports in a number of ways—including identifying and investigating suspected market abuse, for example insider trading and market manipulation. Where the FCA sees any evidence of firms not acting properly it will not hesitate to act."
The failures are particularly concerning, said the FCA, given that it already provides extensive guidance to firms on how to submit and check these reports, and has taken action against seven firms, including Barclays and Credit Suisse, for similar reporting errors.
“The size of the fine reflects the serious nature of the issue,” it concluded. RBS agreed to settle at an early stage of the investigation, and received a 30 percent reduction of its fine.
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