Compliance Corner: Monetary Authority Of Singapore, Credit Suisse

Editorial Staff 5 January 2024

Compliance Corner: Monetary Authority Of Singapore, Credit Suisse

The latest compliance news: regulatory developments, punishments, guidance, permissions, new product and service offerings.

Monetary Authority of Singapore, Credit Suisse
The Monetary Authority of Singapore has imposed a civil penalty of S$3.9 million ($2.93 million) on Credit Suisse for not preventing or detecting misconduct by its relationship managers in its Singapore branch. 

The RMs had provided clients with inaccurate or incomplete post-trade disclosures, resulting in clients being charged spreads which were above bilaterally agreed rates for 39 over-the-counter (OTC) bond transactions, MAS said in a statement on 28 December 2023. 

Credit Suisse has since strengthened its internal controls to prevent the recurrence of such misconduct, MAS said.

The Zurich-listed banking group (now being absorbed into UBS) has also admitted liability for its failure to prevent or detect the misconduct by its RMs, and paid MAS the civil penalty. As part of the civil penalty settlement, Credit Suisse has also separately compensated its affected clients.

When Credit Suisse executes OTC transactions requested by its clients, it charges a spread over the price obtained from the relevant interbank counterparties. For the 39 transactions, the RMs had, in contravention of sections 201(c) and 201(d) of the Securities and Futures Act 2001 (SFA):

-- made false statements to their clients regarding the executed interbank prices and/or spreads charged; and/or
-- omitted material information that the spreads charged were above the agreed rates.MAS’s action follows its review of pricing and disclosure practices in the private banking industry. Investigations revealed that the bank had failed to put in place adequate controls, such as post-trade monitoring, to prevent or detect the RMs’ misconduct. 

Under legislation, MAS may enter into an agreement with any person for that person to pay, with or without admitting liability, a civil penalty. The penalty may be up to three times the amount of the profit gained or loss avoided by that person as a result of the contravention, subject to a minimum of S$50,000 (if the person is not a corporation) or S$100,000 (if the person is a corporation).

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