UBS has landed it legal hot waters in Singapore after its employees overcharged and failed to be transparent to clients.
The Monetary Authority of Singapore (MAS) has slammed the investment bank with a $11.2m fine after UBS’ client advisers broke the rules of the Securities and Futures Act (SFA).
The client advisers had committed acts that deceived or were likely to deceive customers about the spreads and interbank prices for transactions over the counter bonds and structured products.
MAS was made aware of the issue after UBS alerted the authority in 2016 that it had uncovered potential malpractices in Hong Kong and Singapore.
At the time, UBS’ practise was to execute over the counter transactions requested by clients by charging a spread over the interbank price that it obtained from the counterparty.
The ensuing MAS investigation unveiled that, firstly, that advisers failed to adhere to the spread or interbank trade of a price, secondly, that they neglected to disclose or only partly disclosed to clients if there were price improvements in the interbank price of a limit order and, thirdly, that they overcharged clients in excess of the fees set out in the UBS’ fee disclosure documents.
“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 Ong Chong Tee, deputy managing director of financial supervision at MAS. “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.”
UBS has admitted liability and paid the civil penalty, which included compensation to the affected parties.
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