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UK regulator fines UBS unit £27.6M for transaction reporting failures


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UK regulator fines UBS unit £27.6M for transaction reporting failures

The U.K. Financial Conduct Authority imposed a roughly £27.6 million fine on UBS Group AG unit UBS AG for misreporting millions of transactions for nearly a decade.

The fine covers 135.8 million transaction reports between November 2007 and May 2017.

The regulator said the Swiss lender failed to ensure it provided complete and accurate information for roughly 86.67 million of the transactions and erroneously reported 49.1 million transactions that it was not required to. The bank also "failed to take reasonable care to organize and control its affairs responsibly and effectively in respect of its transaction reporting," the FCA added.

UBS agreed to resolve the issue and therefore qualified for a 30% discount in the overall penalty, which otherwise would have been more than £39.4 million.

"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," said Mark Steward, FCA executive director of enforcement and market oversight.

"If firms cannot report their transactions accurately, fundamental risks arise, including the risk that market abuse may be hidden."

The FCA has fined 12 banks including Royal Bank of Scotland Group PLC, Deutsche Bank AG's London branch and Bank of America Corp. unit Merrill Lynch International for similar shortcomings, but the UBS fine is the largest levied by the regulator for transaction reporting breaches, the Financial Times noted.

A UBS spokeswoman said the lender is fully provisioned for the fine, the report added.

The FCA fine comes after UBS and its French unit were fined a record total of €4.5 billion in a tax fraud case in France, prompting the Swiss banking group to earmark a total of €450 million, which it said represents the "best estimate" of the potential fine when the case is finalized. UBS was also among banks recently fined by Hong Kong's Securities and Futures Commission for failures in sponsoring IPOs as far back as 10 years ago.