The city-state's regulator forces the US-based institution to cough up a civil penalty related to relationship managers overcharging clients on over-the-counter bond trades.
The Monetary Authority of Singapore (MAS) has levied a penalty of S$2.4 million on JPMorgan Chase Bank over relationship manager misconduct.
According to an announcement issued Monday, the private banking business relationship managers made «inaccurate or incomplete» disclosures to clients that resulted in them being charged spreads «above the bilaterally agreed rates».
Not Available
«This enforcement action on JPM follows MAS’ review of pricing and disclosure practices in the private banking industry. Investigations found that for OTC bond transactions, JPM’s practice was to charge clients a spread over the interbank prices. As the interbank prices were not available to clients, they had to rely on the RMs’ representations to them regarding the interbank prices and spreads,» the MAS indicated.
The regulator maintained that the bank did not have the necessary processes and controls in place to make sure that its relationship managers kept to pre-agreed spreads when executing over-the-counter bond transactions.
Misrepresented or Omitted
That resulted in the bankers either misrepresenting the price components of the bond trades in question or omitting the material information that the spreads being charged were above the agreed rates.
«JPM has admitted liability under section 236C of the SFA for its failure to prevent or detect the misconduct by its RMs and has paid MAS the civil penalty. The bank has refunded the overcharged fees to affected clients.
The bank has also enhanced its pricing frameworks and internal controls to prevent the recurrence of such misconduct. Separate reviews into the individual RMs involved in the misconduct are ongoing,» the MAS stated.
