JP Morgan has been fined €1.6m by the Central Bank of Ireland over regulatory failures in the country.
The central bank penalised the American banking giant’s JP Morgan Administration Services (Ireland) for four breaches related to outsourcing fund administration activities.
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JP Morgan failed to procure necessary prior approvals to outsource fund administration activities. It also failed to have adequate control systems to fulfil Ireland’s outsourcing requirements.
The lender admitted the breaches for a varying period from seven months to two years and 11 months. All these failures were between July 2013 and June 2016.
The central bank determined that the ‘appropriate fine’ for the branches was €2.29m. However, the figure was reduced by 30% in accordance with the settlement discount scheme.
Central Bank Enforcement and Anti-Money Laundering director Seána Cunningham said: “Outsourcing plays a key role in the provision of regulated financial services and it is vital that regulated firms can demonstrate a clear understanding of their outsourcing arrangements, the associated risks and the effectiveness of the governance and risk management measures in place in respect of those arrangements.
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By GlobalData“This is the first enforcement action taken by the Central Bank against a fund administration firm in relation to outsourcing failures.
“When firms outsource activities, they do not outsource their responsibilities. It is important for firms to have strong controls in place around the governance and oversight of all outsourcing arrangements to ensure that they comply with all legal and regulatory requirements.”
Last month, Central Bank of Ireland fined Permanent TSB €21m for tracker mortgage breaches.
