UBS Toughens Australian Research Compliance After ASIC Inquiry

  • Swiss bank restricts e-mails, chat from Australian researchers
  • Watchdog investigated UBS after a research report was altered

UBS Group AG has beefed up compliance for its Australian business after the country’s securities regulator ruled the bank’s controls covering its research department were inadequate.

The Swiss lender is taking steps to improve oversight of its research department and ASIC won’t take any further action, the Australian Securities and Investments Commission said in an e-mailed statement on Tuesday. ASIC had voiced concerns that the bank’s compliance framework was inadequate for a bank of its size, the e-mail said.

UBS earlier this year defended its amendment of a research report on the planned lease of an Australian power network. A subheading in the March 17 report titled ‘Bad for the budget, good for the state’ was amended to just ‘Good for the state’ because the original was misleading, Chris Williams, head of research at the time, told a New South Wales state parliamentary inquiry in May. The amendments prompted ASIC to investigate so-called Chinese walls that separate the research unit from other parts of the firm.

ASIC said UBS will make changes in structure, procedures and training. These will include appointing more supervisory roles in its research department and making all staff undertake training focused on information barriers.

The bank’s researchers will be prohibited from e-mailing and having chat communications with anyone outside their department if the information covers analysis and views that differ from published research.

Caroline Gurney, a Sydney-based spokeswoman for UBS, declined to comment when phoned by Bloomberg News.

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