FCA fines UBS £27.6m for dire reporting of deals

The City watchdog has fined UBS more than £27m for failing to keep proper records on nearly 136m transactions over a decade.

The Financial Conduct Authority said the Swiss bank failed to make sure it reported 86.7m transactions properly between November 2007 and May 2017. It also reported 49.1m transactions to the regulator that were not reportable.

In total the bank made 135.8m reporting errors on transactions during that period, resulting in a fine of £27.6m. UBS received a 30% discount for settling the case without which it would have paid £39.4m.

As part of efforts to monitor for market abuse at firms and the wider market, banks need to tell the FCA details on every single financial market transaction, including details of the product traded, the firm that undertook the trade, the trade counterparty, the client if applicable and characteristics of the trade such as price, quantity and venue. Much of this data is also shared with certain external parties, such as the Bank of England.

Mark Steward, the FCA’s head 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.”

The FCA said UBS also failed to take reasonable care to organise and control its affairs responsibly for transaction reporting. Its change management processes, upkeep of data and tests for accurate transactions were inadequate, the regulator said.

UBS’s punishment takes FCA fines so far in 2019 to more than double the amount for all of 2018. In the current year the regulator has imposed £136m of penalties compared with £60.4m in 2018.