The bank told this publication that the penalty "finally resolves" the matter that it had self-identified and reported to regulators in Hong Kong and Singapore.

UBS says it has drawn a line under advisors’ deceptive actions, having been hit with a S$12.2 million penalty by Singaporean regulators.

The Monetary Authority of Singapore imposed the penalty on the Swiss bank for “acts of its client advisors that contravened section 201(b) of the Securities and Futures Act. The client advisors had engaged in acts that deceived or were likely to deceive clients about the spreads and/or interbank prices for transactions in over-the-counter (OTC) bonds and structured products,” MAS said in a statement last week. 

Asked by WealthBriefingAsia for comment, UBS said: "This finally resolves the matter that we had self-identified and reported to the regulators in Hong Kong and Singapore. The self-reporting included a plan to fully reimburse the affected wealth management clients and is limited to a very small percentage of all transactions processed through the bank's order processing system during this period. The behaviour of the individuals involved is unacceptable and in strong contrast to the behavioural principles of our firm."

UBS admitted that it was liable for its client advisors' actions; the bank will compensate all affected clients managed by UBS’ Singapore branch, the MAS statement said. 

The regulator’s penalty covers transactions made from 2014 onwards in Singapore-managed accounts. However, UBS has undertaken to compensate all affected clients for misconduct during the period 2008 to 2017. Investigations into the individuals involved in the misconduct continue.

“The conduct of UBS through its representatives is unacceptable and has no place in the financial services industry where trust and integrity are paramount. Our enforcement action and penalty took into account that UBS has undertaken to compensate affected clients and that the bank rendered full cooperation to MAS during the investigation,” Ong Chong Tee, deputy managing director (Financial Supervision), MAS, said.

Explaining what happened, the regulator said that when UBS carried out over-the-counter transactions requested by its clients, it did so with interbank counterparties, and its practice was to charge a spread over the interbank price that it obtained from the counterparty. In 2016, UBS reported to MAS that the bank had uncovered certain malpractices in Hong Kong and Singapore with regard to spread taking in OTC transactions.

In several cases, investigations showed that client advisors either did not adhere to the spread or interbank price of a trade as agreed with or understood by the client; failed to disclose or made only partial disclosure to the client when there was a price improvement in the interbank price of a limit order; and/or overcharged the clients in excess of the fees set out in the bank’s fee disclosure documents to clients.