StanChart confirms US fine and compliance monitoring extension
UK bank Standard Chartered has been fined $300m (£181m) by US regulators and will need to enhance surveillance of its transactions as well as face an extension to current compliance monitoring.
The bank agreed the settlement with New York's Department of Financial Services (NYDFS), as had been expected, for deficiencies in its anti-money procedures at its New York branch.
Standard Chartered will now face certain temporary restrictions on opening dollar accounts for Hong Kong clients, while certain clients from United Arab Emirates will be more closely monitored.
The bank has been monitored for compliance and, while the regulator has not alleged any wrongdoing at the bank, it identified a deficiency in surveillance systems that failed to catch millions of high-risk transactions that should have been left aside for later inspection.
NYDFS superintendent Benjamin Lawsky said: "If a bank fails to live up to its commitments, there should be consequences."
The NYDFS-appointed independent compliance monitor will now remain in place for a further two years, while the bank has agreed to enhance its transaction surveillance system at the New York branch.
Overseeing the transaction surveillance system and the effectiveness of the bank's overall financial crime control efforts will be a board-level "Financial Crime Risk Committee".
The bank said its US licences and the vast majority of its clients and businesses would be unaffected by the settlement.
Broker Investec said the remedial measures appear to be "slightly more intrusive than anticipated" and that the scale of the penalty appears to be "very high in relation to its alleged failings", but as with the bank's 2012 fine, "Standard Chartered appears quite unable to protect itself against the NYDFS".
Due to the measures and restrictions, the broker says, with the bank's growth strategy is primarily being focused on deepening existing relationships, it estimates a "1-2% adverse earnings impact".
Standard Chartered shares were up 0.57% to 1,224.5p at 08:26 on Wednesday.
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