The Monetary Authority of Singapore (MAS) has fined JP Morgan S2.4 million (US$1.79 million) over relationship manager misconduct, which resulted in clients being overcharged.
For over-the-counter (OTC) bond transactions, JP Morgan charges clients a spread across interbank prices. As these prices are not available to clients, relationship managers are relied upon to provide them.
During a review of private banks’ pricing and disclosure practices, MAS found that in 24 such transactions between November 2018 and September 2019 incomplete or inaccurate disclosures were made. This resulted in clients being charged spreads above bilaterally agreed rates.
MAS states that JP Morgan did not have sufficient processes and controls in place to ensure that relationship managers kept to pre-agreed spreads when handling clients’ transactions. The bank has amended its pricing frameworks and internal controls in light of the events, it said.
In addition to the fine, clients who were overcharged on fees have been refunded. The individuals directly involved in the misconduct are under independent reviews.
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