J.P. Morgan Administration Services was fined €1.6 million ($2 million) by the Irish Central Bank due to failing to rectify breaches related to outsourcing of fund administration to Ireland, the bank said in a statement Wednesday.
Between July 2013 and June 2016, J.P.Morgan's fund services arm failed to implement adequate control systems to ensure that the firm satisfied outsourcing requirements for fund administrators set by the Ireland's central bank.
The bank said the J.P. Morgan unit "did not always have a clear understanding of, and controls around, its outsourcing arrangements," undermining its risk management.
The unit'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' failure to address the root causes of these weaknesses over several years," Seana Cunningham, the central bank's director of enforcement and anti-money laundering said in the statement.
A J.P.Morgan spokesman said in an emailed statement Wednesday: "J.P. Morgan has cooperated fully with the (bank) and has already made remedial adjustments to controls procedures in the associated legal entity in Ireland. At no point were our clients or the quality of the service we provide to them affected, and we continue to operate our fund administration business normally."