HONG KONG Hong Kong's Securities and Futures Commission (SFC) said on Tuesday it reprimanded Royal Bank of Scotland (RBS.L) for internal control failures, fining the bank HK$6 million ($773,800).
The SFC said in a statement RBS failed to detect and prevent unauthorized trades in its emerging markets rates business in the city in 2011, following the discovery of unauthorized trades by former trader Shirlina Tsang.
Tsang was sentenced last year to 50 months in jail after pleading guilty to fraud after was she caught falsifying records of her trades, Reuters previously reported.
"We put in place a comprehensive remediation program that strengthened our governance and supervisory oversight, and our control environment," RBS said in an e-mailed statement.
The SFC called RBS's systems and controls at the emerging markets rates business "seriously inadequate and revealed significant weaknesses in its procedures, management systems and internal controls," but the regulator said its decision took into consideration the bank's speedy action in alerting it to the misdeed.
"This deserves substantial credit and is the reason why today's sanctions are not heavier ones," Mark Steward, the SFC's head of enforcement, said in a statement. ($1 = 7.7538 Hong Kong Dollars)
(This story has been corrected in third paragraph to remove "on Friday")
(Reporting by Elzio Barreto; Editing by Erica Billingham and Louise Heavens)