RBS 2006 Annual Report Download - page 249
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Please find page 249 of the 2006 RBS annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.RBS Group • Annual Report and Accounts 2006
248
Additional information continued
Additional information
1.5 Fraud
During 2006, the FSA reviewed and reported on several
fraud related topics across the financial services industry.
These have been designed to raise awareness and
understanding of their expectations in managing fraud risks
at a general level such as ‘Firm’s High Level Management
of Fraud Risk,’ and have also been issued to cover
recommendations on specific topics such as ‘Online Fraud’,
‘Mortgage Fraud’ and ‘Commercial Property Fraud’.
1.6 Enforcement
Where appropriate, the FSA may discipline and/or
prosecute for breaches of the legislative or regulatory
requirements. The FSA works closely with the criminal
authorities and uses both civil and criminal powers. It can
withdraw a firm's authorisation, discipline firms and
individuals, prosecute for various offences and require
funds to be returned to customers.
The FSA also has powers under certain consumer
legislation to take action against authorised firms to
address unfair terms in financial services consumer
contracts.
2 Europe
Much of the regulatory agenda in the UK and other
European Member States in which the Group operates
continues to be set by the European Union. Legislation
comprising the EU’s Financial Services Action Plan
is nearly complete and implemented, with attention now
turning to the policy agenda through to 2010. The
Commission wishes to pursue a different approach to
policymaking: costed, evidence-based and targeted.
Nonetheless, there are some major initiatives already
in the pipeline; including a revised Consumer Credit
Directive, a directive to establish a legal framework for
the euro payments area, Solvency II (a revised EU capital
framework for insurance companies), and possible
legislation on mortgage credit and investment funds.
The Group has been increasingly engaged with the EU
and national policymakers on all these priority measures,
and will aim to maintain this level of involvement.
The Group conducts business in several European
countries. Notable European operations include business
in the Republic of Ireland through the Ulster Bank Group
(regulated by the Irish Financial Regulator); and Retail and
Insurance business through the Retail Markets and RBS
Insurance divisions in Germany, Italy, Spain and the
Netherlands (regulated by those countries’ respective
regulatory authorities). In all of these operations the Group
recognises the importance of meeting the respective
regulatory requirements.
3 United States
As the ultimate parent of Citizens’ subsidiary US banks, the
company is a bank holding company within the meaning of,
and subject to regulation and supervision under, the US
Bank Holding Company Act of 1956, as amended (the
”BHCA”), by the Board of Governors of the Federal
Reserve System (the “Federal Reserve Board”). Under
current Federal Reserve Board policy, the company is
expected to act as a source of financial strength to its US
bank subsidiaries. Bank holding companies that meet
certain eligibility criteria may elect to become ‘financial
holding companies’ under the BHCA. The company
elected to become a financial holding company effective in
February 2004. As a financial holding company, the
company may engage in any activity, and may acquire and
retain the shares of any company engaged in any activity,
that the Federal Reserve Board has determined to be
‘financial in nature’ or ‘incidental’ or ‘complementary’
thereto. Activities that meet these criteria include
unrestricted securities underwriting and dealing, insurance
underwriting, and various venture capital or investment
activities. Financial holding companies must give the
Federal Reserve Board after-the-fact notice of any such
new activities.
Bank holding companies (including bank holding
companies that are also financial holding companies,
such as the company) are required to obtain the prior
approval of the Federal Reserve Board before acquiring,
directly or indirectly, the ownership or control of more
than 5% of any class of the voting shares of any US bank
or bank holding company.
The company’s US bank and non-bank subsidiaries and
The Royal Bank of Scotland’s US offices, are subject to
direct supervision and regulation by various other federal
and state authorities. Citizens’ state-chartered bank
subsidiaries are subject to regulation and supervision by
state banking authorities and the US Federal Deposit
Insurance Corporation, and The Royal Bank of Scotland’s
New York branch is supervised by the New York State
Banking Department. The company’s US insurance
agencies are regulated by state insurance authorities.
The company’s US securities affiliates, including
Greenwich Capital Markets, Inc., are subject to regulation
and supervision by the US Securities and Exchange
Commission and various self-regulating organisations.
The futures activities of Greenwich Capital Markets, Inc.
are also subject to oversight by the US Commodity Futures
Trading Commission and the Chicago Board of Trade.
Charter One Bank, N.A., Citizens Bank, N.A., and RBS
National Bank are regulated and supervised primarily by
the US Office of the Comptroller of the Currency.