UK regulator fines RBS £5.6m for incorrect reporting

The Royal Bank of Scotland has been fined £5,620,300 by the Financial Conduct Authority for incorrectly reporting transactions made in wholesale markets and in some instances failing to report transactions at all.

According to the FCA, RBS failed to properly report 44.8m transactions between November 2007 and February 2013 and failed altogether to report 804,000 transactions between November 2007 and February 2012. This represents 37 per cent of relevant transactions carried out by RBS in this period, and breaches FCA rules on transaction reporting and its requirements for firms to have adequate management and controls.

RBS received a 30 per cent reduction in the fine as it agreed to settle at an early stage of the investigaiton. Seven other firms, including Barclays and Credit Suisse, have also been fined by the financial regulator for similar failings.

Many of the problems with RBS’s systems were made worse by the takeover of ABN Amro bank in October 2007, but the FCA believes that RBS should have had the resources to ensure adequate systems were in place. Most of the bank's errors involved assigning an incorrect reference code to trades, which made it impssible to find out exactly who was responsible for each.

Tracey McDermott, the FCA’s director of enforcement and financial crime, said:

Effective market surveillance depends on accurate and timely reporting of transactions. We have set out clear guidance on transaction reporting, backed up by extensive market monitoring, and we expect firms to get it right. As well as a financial penalty, firms can expect to incur the cost of resubmitting historically incorrect reports. We will continue to take appropriate action against any firm that fails to meet our requirements.

RBS shares seem unaffected, up 0.83 per cent.