RBS fined £5.6m for report breaches

RBS broke reporting rules on more than a third of its wholesale market transactions for more than five years until February 2013, the FCA said
24 July 2013

Taxpayer-backed Royal Bank of Scotland has been fined £5.6 million by a City watchdog for failing to properly report almost 45 million deals it made on wholesale money markets.

The Financial Conduct Authority (FCA) said the bank broke reporting rules on more than a third of its wholesale market transactions for more than five years until February this year.

The FCA said many of the problems were compounded by the 81% state-owned bank's disastrous takeover of Dutch lender ABN Amro in 2007 - but said RBS should have been able to overcome these challenges and ensure that adequate systems and controls were in place.

The FCA said RBS failed to accurately - and in some cases failed altogether - to report financial transactions for assets such as shares, government bonds and derivatives between it and other financial firms.

The fine is the latest blow for the semi-nationalised lender after its respected boss, Stephen Hester, revealed last month that he is leaving after being ousted by Chancellor George Osborne. And it follows a £390 million fine imposed by US and UK authorities in February for rigging the Libor interbank lending rate.

The regulator said accurate and complete transaction reporting is vital to detect and investigate market abuse.

Tracey McDermott, the FCA's director of enforcement and financial crime, said: "Effective market surveillance depends on accurate and timely reporting of transactions. We expect firms to get it right."

The FCA said RBS failed to properly report 44.8 million wholesale transactions between November 2007 and February 2013, and 804,000 transactions between November 2007 and February 2012 were not reported at all. That meant 37% of its deals during the period breached reporting rules. Firms must report details including when a product has been traded, with whom, what price and the quantity. These reports should have been submitted to the FCA's predecessor, the Financial Services Authority.

The ABN Amro deal at the peak of the market led to the collapse of RBS in November 2008, when the credit crunch forced a £45 billion government bailout. But the FCA said that, despite the ABN problems, RBS had considerable resources to overcome these and ensure it met reporting rules. The regulator said RBS's fine would have been more than £8 million if it had not settled early.

RBS said: "RBS fully co-operated with the regulator throughout the investigation. We regret the failings that were uncovered and have subsequently made significant investments to our systems and controls in this area."

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Create Account you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy policy .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in