Standard Chartered fined record £46.55m by PRA

April 29, 2022

Financial penalty imposed for regulatory reporting failings related to US dollar liquidity position

UK regulatory body the Prudential Regulation Authority (PRA) has issued Standard Chartered Bank with a £46.55 million fine for systems and oversight reporting that “fell significantly below” the standards expected.

The financial penalty, which is the highest ever in a “PRA-only” enforcement case, has been imposed for “failing to be open and cooperative with the PRA”.

The fine is also in recognition of failings in the bank’s regulatory reporting governance and controls in relation to a tailored PRA liquidity expectation, the regulator said.

The incident dates back to October 2017, when the PRA imposed a temporary additional liquidity expectation on Standard Chartered due to concerns about the heightened risk of US dollar liquidity outflows, which has since been removed.

According to the PRA, while the bank's overall liquidity position remained in surplus to its core liquidity requirements, between March 2018 and May 2019, Standard Chartered made five errors reporting the liquidity metric, one of which it only notified the PRA about after a four-month internal investigation into the issue.

The delay in reporting meant that the PRA did not have a “reliable overview” of the bank’s US dollar liquidity position.

As a result, Standard Chartered was in breach of Fundamental Rule 7 of the PRA Rulebook.

Sam Woods, deputy governor for prudential regulation and chief executive of the PRA 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.

“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.”

An investigation into the bank revealed a number of other failures, which meant it also breached Fundamental Rule 6.

The fine issued to Standard Chartered would have been £66.5 million, but after agreeing to resolve the issue, the PRA applied a 30% reduction.