PRA fines Standard Chartered £46.55m for reporting failures

The Prudential Regulation Authority (PRA) has fined Standard Chartered Bank (SCB) £46.55 million for “failing to be open and cooperative with the PRA and for failings in its regulatory reporting governance and controls in relation to a tailored PRA liquidity expectation”.

Standard Chartered qualified for a 30% reduction in the fine

The penalty levied against SCB is the PRA’s highest ever fine in a PRA-only enforcement case.

SCB agreed to resolve the matter with the PRA and therefore qualified for a 30% reduction in the fine. Without this discount, the fine imposed would have been £66.5 million.

The PRA says that in October 2017, it imposed a temporary additional liquidity expectation on SCB in response to concerns about heightened risk of US dollar liquidity outflows, also known as the liquidity metric. This temporary expectation has now been removed.

While SCB’s overall liquidity position remained in surplus to its core liquidity requirements, between March 2018 and May 2019, the PRA says SCB made five errors reporting the liquidity metric, which meant the regulator did not have a reliable overview of its US dollar liquidity position.

The PRA says the bank only notified the regulator of one of the misreporting errors after a four-month internal investigation.

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

“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.”