The penalty stems from failings relating to 135.8 million transaction reports between November 2007 and May 2017.
The UK Financial Conduct Authority (FCA) has just announced the imposition of a financial penalty of £27,599,400 on UBS AG over transaction reporting failures.
The heavy fine stems from for failings relating to 135.8 million transaction reports between November 2007 and May 2017.
UBS has been found to have failed to ensure it provided complete and accurate information in relation to approximately 86.67 million reportable transactions. 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 135.8 million errors in its transaction reporting, in violation of FCA rules.
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.
UBS agreed to resolve the case and, hence, qualified for a 30% discount in the overall penalty. Without this discount, the FCA would have imposed a financial penalty of £39,427,795.
Mark Steward, FCA Executive Director of Enforcement and Market Oversight 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.’
To date, the FCA has fined 12 other firms for MiFID transaction reporting breaches: Merrill Lynch International (MLI), Deutsche Bank AG, Royal Bank of Scotland (RBS), James Sharp & Co, Plus500UK, City Index Limited, Société Générale, Commerzbank AG, Instinet Europe Limited, Getco Europe Limited, Credit Suisse and Barclays Capital Securities Limited and Barclays Bank Plc.