The financial watchdog is currently investigating banking giant HSBC over possible compliance failings.
As well as monitoring the bank’s money laundering controls, the Financial Conduct Authority is also probing the bank’s financial crime systems, HSBC revealed yesterday (21 February).
A spokesman from HSBC confirmed that the bank is subject to a Section 166 review, or skilled persons report, where the regulator gives an independent party such as an accounting firm the power to scrutinise a company’s controls.
The 166 report, which is launched where there is cause for concern, is more or a supervisory mechanism rather than enforcement, but can be referred to the regulator to take action if problems are identified.
The FCA declined to comment.
This comes as the bank revealed that its pre-tax profits had plunged by 62 per cent last year.
The FCA’s inquiry adds to the list of regulatory issues affecting HSBC, with the US Department of Justice currently investigating potential issues around the bank’s anti-money laundering controls.
Back in 2012, HSBC was forced to make payments totalling $1.9bn (£1.5bn) to US authorities after it was found to have inadequate controls in place.
The group was told to install an independent compliance monitor, which has since identified potential anti-money laundering issues.
The bank is also the subject of other ongoing investigations and reviews by the US Department of Justice.