In July 2005 UBS Wealth Management (UBS WM) made a suspicious transaction report to the FSA. Following a review of this report by the FSA it was established that the transaction – a client purchase – had been incorrectly reported as a client sale.
A subsequent review by UBS WM of its transaction reporting found that since October 1999 all equity transactions executed by it with outside brokers had been incorrectly reported, with UBS WM denoted as Principal when it was in fact the Agent. UBS WM had also relied on another division of UBS to report those transactions executed with that division and it was found that these were either not reported or reported incorrectly since May 1999.
The FSA relies on firms to provide accurate transaction reports to enable it to maintain confidence in the financial markets and reduce financial crime.
UBS is taking the necessary remedial steps to improve its systems and controls in this area and has co-operated fully with the FSA's investigation into this matter. The decision in this case was the first made using the settlement process introduced following the Enforcement Process Review.
Background
- The full text of the Final Notice is available on the FSA website. This includes the background to the case, the relevant statutory provisions, and the regulatory requirements contravened and the factors taken into account by the RDC when setting the level of the fine.
UBS Final Notice [PDF] - This case was settled using the settlement process introduced on 20 October 2005. Sally Dewar, Director of Markets Division and Thomas Huertas, Director of Wholesale Firms acted as Settlement Decision Makers on behalf of the FSA.
- The FSA has recently published a new guide to its enforcement procedure.
Enforcement procedure guide [PDF] - The FSA, in August, fined Bear Stearns £40,000 for failing to report its CFD transactions
Bear Stearns Final Notice [PDF] - The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.