Featured Product

    PRA Fines Citigroup for Non-Compliance with Reporting Requirements

    November 26, 2019

    PRA imposed a combined financial penalty of GBP 43.9 million on Citigroup Global Markets Limited, Citibank N.A. London branch, and Citibank Europe Plc UK branch, for failings in relation to their internal controls and governance arrangements underpinning compliance with the PRA regulatory reporting requirements. Citigroup Global Markets Limited and Citibank N.A. London branch breached Fundamental Rule 6 of the PRA Rulebook while Citibank N.A. London branch and Citibank Europe Plc UK branch breached the Branch Return Rule (which was in effect from July 01, 2015). Additionally, all three firms breached Rule 6.1 of the Notifications Part of the PRA Rulebook.

    Between June 19, 2014 and December 31, 2018, or parts thereof, the firms’ UK regulatory reporting framework was not designed, implemented, or operating effectively. This led to them failing to submit complete and accurate regulatory returns to PRA. Significant errors were found in the firms’ returns, which included six substantive matters that had a material or potentially material impact on the returns. The pervasiveness of the errors and misstatements identified in the returns raised fundamental concerns about the effectiveness of Citi’s UK regulatory reporting control framework, did not provide PRA with an accurate picture of capital or liquidity position of Citigroup Global Markets Limited, and negatively impacted the ability of PRA to supervise Citi. While Citi remained in surplus to its liquidity and capital requirements at all times, the failings persisted over a significant length of time and were serious and widespread in nature. 

    The investigation of PRA focused on, liquidity returns, capital, and leverage returns of Citigroup Global Markets Limited, Citibank Europe Plc UK, and Citibank N.A. London branch returns.The investigation identified that:

    • Citi failed to ensure that systems and controls supporting its UK regulatory reporting framework were designed, implemented, and operating effectively
    • Citi failed to allocate adequate human resources to ensure that liquidity returns of Citigroup Global Markets Limited were complete and accurate
    • Citi’s documentation of multiple aspects of its UK regulatory reporting control framework was inadequate given its size, complexity, and systemic importance
    • Citigroup Global Markets Limited's approach to technical interpretations of reporting requirements was insufficiently robust, given the complexity of those decisions and the impact they could have on the accuracy of the returns
    • Citi’s oversight and governance in relation to regulatory reporting fell significantly below the standards expected of a systemically important institution

    The firms agreed to settle during the discount stage of the PRA investigation. As a result, the firms qualified for a 30% settlement discount under the PRA Settlement Policy. Were it not for this discount, PRA would have imposed a financial penalty of GBP 62.7 million on the firms.

     

    Related Links

    Keywords: Europe, UK, Banking, Citigroup, PRA Rulebook, Compliance Risk, LCR, Leverage Ratio, Regulatory Capital, Reporting, PRA

    Featured Experts
    Related Articles
    News

    ECB Amends Guideline on Temporary Collateral Easing Measures

    ECB published Guideline 2021/975, which amends Guideline ECB/2014/31, on the additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral.

    June 17, 2021 WebPage Regulatory News
    News

    EIOPA Releases Report on Artificial Intelligence Governance Principles

    EIOPA published a report, from the Consultative Expert Group on Digital Ethics, that sets out artificial intelligence governance principles for an ethical and trustworthy artificial intelligence in the insurance sector in EU.

    June 17, 2021 WebPage Regulatory News
    News

    HKMA to Increase Focus on Suptech and Regtech Cloud Adoption

    HKMA published the seventh and final issue of the Regtech Watch series, which outlines the three-year roadmap of HKMA to integrate supervisory technology, or suptech, into its processes.

    June 17, 2021 WebPage Regulatory News
    News

    EC Consults on Improving Transparency in Secondary Markets for NPLs

    EC launched a targeted consultation to improve transparency and efficiency in the secondary markets for nonperforming loans (NPLs).

    June 16, 2021 WebPage Regulatory News
    News

    BIS and Nordic Central Banks Launch Innovation Hub in Stockholm

    BIS, Danmarks Nationalbank, Central Bank of Iceland, Norges Bank, and Sveriges Riksbank launched an Innovation Hub in Stockholm, making this the fifth BIS Innovation Hub Center to be opened in the past two years.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Tech Sprint Aims to Explore Technologies to Reach Unbanked

    FDITECH, the technology lab of FDIC, announced a tech sprint that is designed to explore new technologies and techniques that would help expand the capabilities of community banks to meet the needs of unbanked individuals and households.

    June 16, 2021 WebPage Regulatory News
    News

    EC Releases Sustainable Finance Taxonomy Compass

    EC released the EU Taxonomy Compass, which visually represents the contents of the EU Taxonomy starting with the EU Taxonomy Climate Delegated Act.

    June 16, 2021 WebPage Regulatory News
    News

    FDIC Proposes Amendments to Real Estate Lending Standards

    FDIC is seeking comments on a rule to amend the interagency guidelines for real estate lending policies—also known as the Real Estate Lending Standards.

    June 15, 2021 WebPage Regulatory News
    News

    EIOPA to Consider Liquidity Risk in Stress Test for 2021

    EIOPA published its annual report, which sets out the work done in 2020 and indicates the planned work areas for the coming months.

    June 15, 2021 WebPage Regulatory News
    News

    ESRB Paper Discusses Measurement of Impact of Bank Failure via Lending

    The ESRB paper that presents an analytical framework that assesses and quantifies the potential impact of a bank failure on the real economy through the lending function.

    June 15, 2021 WebPage Regulatory News
    RESULTS 1 - 10 OF 7116