The Financial Services Authority (FSA) has today fined UBS AG (UBS) £100,000 for failures in its systems for the reporting of transactions in financial instruments to the FSA and, previously, the Securities and Futures Authority (SFA), from May 1999 to October 2005.
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.