The FSA and the Swiss Financial Market Supervisory Authority are launching an investigation in connection with the £1.3bn trading losses incurred by UBS.
The investigation will be conducted by a third party independent of UBS and will focus on the details of the unauthorised trading activity, and on the control failures which permitted the activity to remain undetected.
The FSA says the investigation will also include an assessment of the overall strength of UBS’s controls to prevent unauthorised or fraudulent trading activity in its investment bank.
It follows the appearance of UBS trader Kweku Adoboli, 31, at City of London magistrates court earlier today, who has been charged with fraud and false accounting.
UBS has said the developments could lead to the bank reporting a loss for the third quarter of 2011 but added that no client positions were affected.