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PRA fines Standard Chartered Bank £46.5m over misreporting

By David Burrows

09:59, 20 December 2021

Standard Chartered HQ in Hong Kong with the company logo featured on the outside of a glass atrium roof
Standard Chartered HQ in Hong Kong – Photo: Shutterstock

The Bank of England’s watchdog, the Prudential Regulation Authority (PRA), has fined Standard Chartered Bank (SCB) £46.55m for misreporting its liquidity position and for failing to be open in its regulatory reporting governance.

This is the PRA’s highest fine to date in a PRA-only enforcement case.

Standard Chartered’s stock price had fallen by 1.5% to 425.40p by mid-morning.

The PRA said the fine related to five regulatory reporting errors made at the bank between March 2018 and May 2019.

The errors meant the PRA did not have a reliable overview of Standard Chartered Bank’s US dollar liquidity position.

US100

16,056.90 Price
-0.170% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 1.8

US500

4,600.80 Price
-0.080% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 0.8

US30

36,219.20 Price
-0.090% 1D Chg, %
Long position overnight fee -0.0262%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 2.2

HK50

16,197.90 Price
-0.460% 1D Chg, %
Long position overnight fee -0.0259%
Short position overnight fee 0.0040%
Overnight fee time 22:00 (UTC)
Spread 30.0

Sam Woods, the PRA’s deputy governor for prudential regulation and its CEO, said: “We expect firms to notify us promptly of any material issues with their regulatory reporting, which Standard Chartered failed to do in this case.”

Poor oversight

He added: “Standard Chartered’s systems, controls and oversight fell significantly below the standards we expect of a systemically important bank, and this is reflected in the size of the fine in this case.”

The PRA said that SCB’s internal controls and governance arrangements underpinning its regulatory reporting in relation to the liquidity metric were not implemented or operating effectively.

These issues contributed to SCB’s liquidity miscalculations and misreporting and also to the failure to be open and co-operative with the PRA.

Markets in this article

STAN
Standard Chartered - GBP
6.571 USD

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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