The Monetary Authority of Singapore (MAS) has imposed a civil penalty on UBS for acts by its client advisors that breached section 201(b) of the Securities and Futures Act (SFA). Under this section, no person shall, directly or indirectly, in connection with the subscription, purchase or sale of any securities engage in any act, practice or course of business which operates as a fraud or deception, or is likely to operate as a fraud or deception, upon any person.

 

UBS’ client advisors had engaged in acts that deceived clients about the spreads and/or interbank prices for transactions in over-the-counter (OTC) bonds and structured products. Investigations into the individuals involved in the misconduct are ongoing.

 

The enforcement action followed UBS’ reporting of the misconduct to MAS, and MAS’ subsequent investigations. UBS has admitted liability for its client advisors’ actions and paid MAS the civil penalty. As part of the civil penalty settlement, UBS will compensate all affected clients managed by UBS’ Singapore branch. While the civil penalty action by MAS against UBS relates to transactions executed from 2014 onwards in Singapore-managed accounts, UBS has undertaken to compensate all affected clients for misconduct during the period 2008 to 2017.

 

MAS’ investigations showed that in numerous transactions, UBS’ client advisors either:

  1. did not adhere to the spread or interbank price of a trade as agreed with or understood by the client;
  2. failed to disclose or made only partial disclosure to the client when there was a price improvement in the interbank price of a limit order; and/or
  3. overcharged the clients in excess of the fees set out in the bank’s fee disclosure documents to clients.

 

Deputy Managing Director (Financial Supervision) of MAS, Mr Ong Chong Tee said, “The conduct of UBS through its representatives is unacceptable and has no place in the financial services industry where trust and integrity are paramount. Our enforcement action and penalty took into account that UBS has undertaken to compensate affected clients and that the bank rendered full cooperation to MAS during the investigation.”

 

The full report from MAS can be accessed here.

 

Date: 15 Nov 2019

Argus Global specializes in regulatory compliance. We can help you determine if your company is up to date with the latest regulations with compliance reviews, and we offer as well ongoing support for all your compliance needs.

 

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