JP Morgan Irish arm hit with €1.6m fine

The Irish subsidiary of US banking giant JP Morgan Chase & Co has been fined nearly €2m for regulatory breaches.

The Central Bank of Ireland reprimanded JP Morgan Administration Services (Ireland) and fined it €1.6m for breaches related to the outsourcing of fund administration activities.

In particular, it found JPMAS had failed to obtain prior approval from the Bank to outsource the activities, and that it did not have adequate control systems to ensure the firm satisfied the Bank’s outsourcing requirements for fund administrators.

Seána Cunningham, director of enforcement and anti-money laundering at the Bank, said: “Outsourcing plays a key role in the provider of regulated financial services and it is vital that regulated firms can demonstrated a clear understanding of the outsourcing arrangements, the associated risks and the effectiveness of the governance and risk management measures in place in respect of those arrangements.

“JPMAS’s failures in this case demonstrated unacceptable weaknesses in its outsourcing framework. These weaknesses were further evidenced by the firm’s repeated failures to satisfactorily remediate the issues identified by the Central Bank as part of its supervisory engagement with the firm. The fine imposed reflects JPMAS’s failure to address the root cause of these weaknesses over several years.”

The Bank added that following “further extensive engagement” it was satisfied JPMAS had “taken the necessary steps to rectify the deficiencies that gave rise to the breaches.”

JP Morgan did not immediately respond to a request to comment.