Extract from the half-year results
As a result of its ongoing reviews and continuing engagement with US authorities, the Group believes that the term of the DPAs is likely to be extended. (The DPAs provide that if the Group fulfils all the requirements imposed by the DPAs, the applicable charges against the Group will be dismissed at the end of their applicable term.)
Separately, certain issues have been identified with respect to the Group’s post-transaction surveillance system, which is part of its anti-money laundering systems and controls and is separate from the Group’s sanctions screening systems. The Group is engaged in discussions with NYSDFS and the Monitor with respect to those issues and their ongoing remediation. The Group believes that the resolution of these issues is likely to involve an enforcement action by the NYSDFS that would include an extension of the term of the Monitor beyond the original two-year term, a monetary penalty and remedial actions.
The Group recognises that its compliance with historical, current and future sanctions, as well as AML and BSA requirements, and customer due diligence practices, not just in the US but throughout its footprint, is and will remain a focus of the relevant authorities. As part of their remit to oversee market conduct, regulators and other agencies in certain markets are conducting investigations or requesting reviews into a number of areas of market conduct, including sales and trading, involving a range of financial products, and submissions made to set various market interest rates and other financial benchmarks, such as foreign exchange. At relevant times, certain of the Group’s branches and/or subsidiaries were (and are) participants in some of those markets, in some cases submitting data to bodies that set such rates and other financial benchmarks. The Group is contributing to industry proposals to strengthen financial benchmarks processes in certain markets and continue to review its practices and processes in the light of the investigations, reviews and the industry proposals.
The Group is co-operating with all relevant ongoing reviews, requests for information and investigations. While the Group seeks to comply with the letter and spirit of all applicable laws and regulations, the outcome of these reviews, requests for information and investigations is uncertain and could result in further actions, penalties or fines but it is not possible to predict the extent of any liabilities or other consequences that may arise.