The Bank of England's Prudential Regulation Authority saidApril 8 that it imposed a fine of nearly £1.4 million on unitQIB (UK) Plc for"significant failings" in assessing, maintaining and reporting to theregulator its financial resources.

The PRA said QIB (UK) failed to recognize that it hadto comply with regulatory requirements relating to the assessment andmaintenance of financial resources and capital from June 30, 2011, to Dec. 31,2012.

The bank further failed to properly monitor andreport to the regulator its total exposure to connected parties. QIB (UK) wassignificantly exposed to a group of connected clients inDecember 2011. As a result, its large exposures amounted to more than 25% ofits capital assets, in breach of regulatory requirements.

Accordingly, the bank was temporarily significantlyundercapitalized and open to higher levels of risk than it had appreciated.

The PRA, however, recognizes that, since December 2012, QIBhas undergone significant restructuring, and an entirely new board is now inplace. The firm has also, since December 2012, committed resources to mattersof governance, capital monitoring and reporting systems and controls tomitigate the risk of similar breaches occurring again.