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Screenshot of a breaking news alert e-mail from Q2 2017
Royal Bank of Scotland’s lack of governance regarding unauthorized trading activities in its emerging markets rates business led to action by Hong Kong’s futures regulator. HKMA now states that it backs the decision
The Hong Kong Monetary Authority (HKMA) reported two days ago that it concurs with the disciplinary action taken by the Securities and Futures Commission (SFC) against The Royal Bank of Scotland PLC (RBS) concerning its internal control failings. The disciplinary action was taken as a result of RBS’s failure to implement adequate and effective systems and controls to detect and prevent unauthorised trading activities and the conduct of its Emerging Markets Rates business in Hong Kong from May 2008 to October 2011.
The HKMA has already taken actions against RBS following its investigation into the root causes of the failings, and has stipulated at the time that it required RBS to implement corrective measures and raised concerns with it regarding the failure of a number of its staff members to adequately perform their duties or who should otherwise bear responsibility for the failures identified.
RBS has cooperated fully with the HKMA in the investigation. It is addressing our concerns with its staff members, and has to date made good progress in implementing the required measures.
Pursuant to a requirement by the HKMA under section 59(2) of the Banking Ordinance, RBS will undertake an independent review in the next six months on the effectiveness of the corrective measures and report the results to the HKMA.
“The actions by the HKMA and SFC are complementary,” said a spokesperson of the HKMA in a public statement this week. “The HKMA’s actions are to ensure that the individuals responsible for the failings are held accountable and that corrective actions are taken promptly by RBS and their effectiveness monitored to prevent the occurrence of similar failings” concluded the spokesman.
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