Regulation  

RBS hit with £5m fine for reporting failures

According to a final notice by the City watchdog the £5.6m penalty was slapped on the state-owned bank after inadequacies in reporting 44.8m transactions and failure to report 804,000 transactions at all since November 2007, shortly after it acquired the Dutch bank ABN Ambro.

The regulator said that the takeover posed “significant systems challenges” for RBS which compounded the problem, but that the bank should have overcome these challenges with its “considerable resources”.

The failure to report transactions properly, if at all, continued until February 2012, and 37 per cent of relevant transactions carried out during this period were flawed.

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RBS agreed to settle at an early stage in the FCA’s probe so it qualified for a 30 per cent discount on the original £8m fine.

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.’’

A spokesman for RBS said: “We fully co-operated with the regulator throughout the investigation. We regret the failings that were uncovered and have subsequently made significant investments to our systems and controls in this area.”

ADVISER VIEW
Mark Insley, managing director of Berkshire-based Ascot Wealth Management, said: “The bank will only be reprivatised if it can prove that it has these accounting areas under control. But I would still have faith in RBS as an adviser in almost every area, except structured products where the underwriting may fall outside regulatory protections. The fact that it is government-backed is a source of great reassurance right now.”

Biggest regulatory fines in 2013

RBS - £87.5m

Prudential - £16m

Prudential - £14m

UBS AG - £9.4m

Sesame Limited - £6m

RBS - £5.6m

Lloyds TSB - £4.3m

EFG Private Bank - £4.2m

JP. Morgan - £3m

Policy Administration Services Limited - £2.8m

Source: FCA