MAS imposes $11.2m civil penalty on UBS over deceptive trades

Swiss bank UBS has paid an $11.2 million civil penalty imposed over deceptive trades undertaken by the bank's client advisers here.

The advisers had "engaged in acts that deceived or were likely to deceive" clients about the spreads relating to certain products.

The acts, which were executed from 2014, violated the Securities and Futures Act.

When UBS executed over-the-counter (OTC) transactions for clients, it did so with interbank counterparties. It would then charge a spread over the interbank price.

In 2016, UBS reported to the Monetary Authority of Singapore (MAS) that it had uncovered certain malpractices in Hong Kong and Singapore with regard to spread-taking in such transactions.

MAS investigations showed that in numerous transactions, UBS advisers did not keep clients fully informed about prices and, in some cases, overcharged them.

This was possible because OTC product prices were not readily accessible, so clients could not verify them against the transacted prices advised by UBS, said the MAS.

UBS has admitted liability for its client advisers' actions and paid the civil penalty. It will also compensate all affected clients managed by its Singapore branch from 2008 to 2017.

UNACCEPTABLE CONDUCT

The conduct of UBS through its representatives is unacceptable and has no place in the financial services industry where trust and integrity are paramount.

MR ONG CHONG TEE, Monetary Authority of Singapore's deputy managing director for financial supervision.

"The conduct of UBS through its representatives is unacceptable and has no place in the financial services industry where trust and integrity are paramount," said Mr Ong Chong Tee, MAS' deputy managing director for financial supervision.

Investigations into the individuals involved are ongoing.

A UBS spokesman said this finally resolves the issue that the bank had "self-identified and reported" to the regulators in Hong Kong and Singapore.

"The behaviour of the individuals involved is unacceptable and in strong contrast to the principles of our firm," he added.

A version of this article appeared in the print edition of The Straits Times on November 15, 2019, with the headline 'MAS imposes $11.2m civil penalty on UBS over deceptive trades'. Print Edition | Subscribe