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Compliance Corner: UBS, Financial Conduct Authority

Editorial Staff, 20 March 2019

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The latest compliance issues in wealth management around the world.

UBS has been fined £27.6 million ($36.6 million) by the UK regulator, the Financial Conduct Authority, for failings relating to 135.8 million transaction reports between November 2007 and May 2017.

The Zurich-listed bank failed to ensure that it provided complete and accurate information in relation to approximately 86.67 million reportable transactions, the FCA said in a statement yesterday. It also erroneously reported 49.1 million transactions to the FCA, which were not, in fact, reportable. Altogether, over a period of nine and a half years, UBS made 135.8m errors in its transaction reporting, breaching FCA rules, the regulator said.

The FCA also found that UBS failed to take reasonable care to organise and control its affairs responsibly and effectively in respect of its transaction reporting. These failings related to aspects of UBS’s change management processes, its maintenance of the reference data used in its reporting and how it tested whether all the transactions it reported to the FCA were accurate and complete, it said.

"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," Mark Steward, FCA executive director of Enforcement and Market Oversight, said.

UBS agreed to resolve the case and so qualified for a 30 per cent discount on the overall penalty. Without this discount, the FCA would have imposed a financial penalty of £39,427,795, the regulator added.

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