HSBC fined £100,000 by FSA over inaccuracy
LONDON – In mid-December, the UK Financial Services Authority (FSA) fined HSBC £100,000 for "failing to take reasonable steps to ensure the accuracy of transaction reports it made to the FSA from December 2002 until August 2005".
The notice triggered an industry-wide examination of the issue, prompted by a 'Dear CEO' letter the FSA issued on the same day.
According to the FSA, in July 2005 it requested certain trading information from HSBC Stockbroker Services (HSS) which, when reviewed, revealed that HSS had reported the client transaction as a 'sale' prior to a positive announcement and a 'purchase' after it.
Following discussions between the FSA and HSBC, it emerged that transaction reports being made through HSS had been inaccurately representing client purchases as client sales and vice versa.
The regulator noted that it relies on firms to provide accurate transaction reports to enable it to monitor the market effectively, and failing to do so could affect the FSA's ability to maintain confidence in the financial markets and reduce financial crime.
HSBC has taken 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 regulator said.
The FSA has previously fined Bear Stearns £40,000 and UBS £100,000 for inaccuracies in transaction reporting.
The 'Dear CEO' letter can be found at: http://www.fsa.gov.uk/pubs/ceo/transaction_reporting.pdf
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@risk.net
More on Regulation
EBA seeks to allay Simm divergence concerns
EU validator pledges to co-ordinate with global regulators, but retains ability to act alone “if needed”
FRTB models find salvation in US Basel III proposal
Changes to P&L attribution test and NMRFs make IMA viable for US banks, risk managers say
US blows the floors off Basel III
Barr criticises “downward deviations” in US rule; Bowman rejects “blind adherence” to global standards
Basel III endgame – a timeline
A review of Risk.net’s coverage of the US implementation saga
Leaked EU plans offer extra temporary relief for FRTB models
Risk factors would need only two observations to be modellable. Do changes foreshadow US Basel III?
Iosco chief talks cyber, AI and clearing
Buenaventura discusses Iosco’s role in aiding market resilience and cross-border co-operation
US regulators bid to save FRTB IMA, but it’s no small task
Even if industry wish-list is granted, a 2028 start date might be too soon for model adoption
Hopes rise for cross-product netting under SA-CCR
Banks want rule change in Basel III endgame to lower capital costs of clearing UST repos