The UK’s Financial Conduct Authority (FCA) has imposed a fine of £27.6m on Swiss multinational investment bank and financial services company UBS over failures of transaction reporting.
UBS has been fined for failings relating to 135.8 million transaction reports between November 2007 and May 2017.
FCA enforcement and market oversight executive director Mark Steward 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.”
Effective market oversight will depend on the complete, accurate and timely reporting of transactions. This information will facilitate FCA to efficiently inspect firms and markets.
Specifically, the transaction reports will allow FCA to detect potential instances of market abuse and combat financial crime.
The UK regulator noted that UBS failed to ensure it provided complete and accurate information in relation to around 86.67m reportable transactions.
UBS also inattentively reported 49.1m transactions to the FCA, which were not, reportable. Breaching FCA rules, UBS made 135.8m errors in its transaction reporting over a period of 9 and a half years.
The regulator also noticed that UBS failed to take judicious care to organize and control its activities responsibly and efficiently related with transaction reporting.
The failings include aspects of UBS’s change management processes, maintenance of the reference data used in its reporting and improper testing of all the transactions that reported to the regulator.
FCA further said that UBS agreed to solve the issues and qualified for a 30% discount in the overall penalty. The FCA would have imposed a financial penalty of £39.4m without discount.
In February this year, UBS said that it will appeal against a French trial court ruling which ordered it to pay penalties of €4.5bn for allegedly helping wealthy clients evade tax.
The firm has noted that it strongly disagrees with the verdict of the court which found it guilty of illicit solicitation and laundering of the proceeds of tax fraud.