UK FSA fines firm £560,000 for breaches
LONDON – The UK's Financial Services Authority (FSA) has fined W Deb MVL (WDM) £560,000 for widespread failings in its systems and controls, which resulted in poor accounting systems and inadequate client money protection. The failings, according to the FSA, occurred over a four and a half year period from December 2001 to May 2005.
"The implementation and maintenance of appropriate systems and controls is essential to maintaining market and consumer confidence in the financial system and individual firms," says Margaret Cole, head of enforcement at the regulator. "A firm that fails to meet these basic requirements can pose significant risks to its clients and ultimately its own financial health."
Overall, the FSA found that WDM had breached four of the FSA Principles for Business as well as relevant FSA rules on client money. The primary effect of these failures was that WDM was unable to monitor its own financial position or to comply with its financial reporting requirements adequately, said the FSA in a statement. This resulted in the firm making total provisions of £66.3 million in its accounts for 2004 and 2005 in respect of assets viewed as irrecoverable. These provisions in turn led to concerns about the firm's solvency and to its former parent company, ING, waiving loans totalling £58 million to ensure it remained adequately capitalised.
Cole adds: "In determining the level of penalty, the FSA has taken into account the fact that WDM and ING identified potential regulatory issues at the firm in 2005 and acted properly and responsibly in reporting these to the FSA. The firm, ING and, since it acquired the firm, Evolution Group plc, have been open and co-operative with the FSA in bringing this investigation to a prompt conclusion."
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.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
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. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Risk, portfolio margin, regulation: regtech to the rescue
A white paper outlining the complexity of setting the course for risk, margin and regulation
Prop shops recoil from EU’s ‘ill-fitting’ capital regime
Large proprietary trading firms complain they are subject to hand-me-down rules originally designed for banks
Revealed: the three EU banks applying for IMA approval
BNP Paribas, Deutsche Bank and Intesa Sanpaolo ask ECB to use internal models for FRTB
FCA presses UK non-banks to put their affairs in order
Greater scrutiny of wind-down plans by regulator could alter capital and liquidity requirements
Industry calls for major rethink of Basel III rules
Isda AGM: Divergence on implementation suggests rules could be flawed, bankers say
Saudi Arabia poised to become clean netting jurisdiction
Isda AGM: Netting regulation awaiting final approvals from regulators
Japanese megabanks shun internal models as FRTB bites
Isda AGM: All in-scope banks opt for standardised approach to market risk; Nomura eyes IMA in 2025
CFTC chair backs easing of G-Sib surcharge in Basel endgame
Isda AGM: Fed’s proposed surcharge changes could hike client clearing cost by 80%
Most read
- Industry urges focus on initial margin instead of intraday VM
- For a growing number of banks, synthetics are the real deal
- Did Fed’s stress capital buffer blunt CCAR?