The Irish regulator fined local subsidiary of JP for € 1.6 million. The financial institution violated the country's regulatory requirements. In three cases out of four, this concerns outsourcing of asset management activities.
In March 2014, the Central Bank conducted a study on the current requirements of Irish JP Morgan. The purpose of the audit was to minimize risks of outsourcing. The regulator has created a whole risk reduction plan, obliging the bank to take a series of measures in order to bring its work in line with the requirements of the Central Bank.
However, subsequent violations were identified by the JP Morgan internal audit service in 2015, and then in 2016.
Due to the fact that the bank did not receive the regulator’s permission to outsource fund management services, as well as due to the lack of proper control systems in one case, the Irish regulator suggested that JP Morgan did not have a clear understanding of outsourcing mechanisms.
In addition, the organization “stubbornly did not eliminate the root causes of these violations, despite repeated interventions of Central Bank observers for several years,” which was regarded as an aggravating factor.
“In this case, JP Morgan’s errors demonstrated unacceptable weaknesses in its outsourcing structure,” commented Seana Cunningham, director of the Central Bank for law enforcement and anti-money laundering.
“These shortcomings were once again confirmed by the organization’s repeated failures in trying to eliminate the problems indicated by the Central Banks as part of the supervisory interaction. The penalty imposed reflects JP’s inability to eliminate the underlying causes of existing shortcomings over several years,” the regulator added.
source: ft.com
In March 2014, the Central Bank conducted a study on the current requirements of Irish JP Morgan. The purpose of the audit was to minimize risks of outsourcing. The regulator has created a whole risk reduction plan, obliging the bank to take a series of measures in order to bring its work in line with the requirements of the Central Bank.
However, subsequent violations were identified by the JP Morgan internal audit service in 2015, and then in 2016.
Due to the fact that the bank did not receive the regulator’s permission to outsource fund management services, as well as due to the lack of proper control systems in one case, the Irish regulator suggested that JP Morgan did not have a clear understanding of outsourcing mechanisms.
In addition, the organization “stubbornly did not eliminate the root causes of these violations, despite repeated interventions of Central Bank observers for several years,” which was regarded as an aggravating factor.
“In this case, JP Morgan’s errors demonstrated unacceptable weaknesses in its outsourcing structure,” commented Seana Cunningham, director of the Central Bank for law enforcement and anti-money laundering.
“These shortcomings were once again confirmed by the organization’s repeated failures in trying to eliminate the problems indicated by the Central Banks as part of the supervisory interaction. The penalty imposed reflects JP’s inability to eliminate the underlying causes of existing shortcomings over several years,” the regulator added.
source: ft.com