NatWest Markets Plc

1. On 6 February 2013, the FSA imposed a financial penalty of £87.5 million on The Royal Bank of Scotland plc (RBS) of 36 St. Andrew Square, Edinburgh, EH2 2YB. 2. The FSA's action took effect on 6 February 2013 and a copy of the Final Notice, which sets out the reason for the action, is displayed on the FSA's website and can be accessed via the following link: http://www.fsa.gov.uk/static/pubs/final/rbs.pdf 3. The London Interbank Offered Rate (LIBOR) is a benchmark reference rate fundamental to the operation of both the UK and international financial markets, including markets in interest rate derivatives contracts. 4. The integrity of benchmark reference rates such as LIBOR is therefore of fundamental importance to both the UK and international financial markets. 5. Between January 2006 and March 2012 (the Relevant Period), RBS breached Principle 3 of the FSA's Principles for Businesses and, between October 2006 and November 2010, RBS breached Principle 5. 6. With respect to the Principle 5 breaches, RBS, in order to benefit its derivatives trading books, sought to manipulate LIBOR in connection with its own submission of rates that formed part of the calculation of Japanese yen (JPY) and Swiss franc (CHF) LIBOR and also sought to influence other banks' JPY LIBOR submissions. RBS also on occasion inappropriately considered the impact of LIBOR and RBS's LIBOR submissions on the profitability of transactions in its money market trading books as a factor when making (or directing other to make) JPY, CHF and USD LIBOR submissions. 7. With respect to the Principle 3 breaches, RBS failed to have adequate risk management systems and controls in place in relation to its LIBOR submissions process. RBS did not begin to put such systems and controls in place until March 2011 and its initial measures were inadequate because they did not address the risk that RBS derivatives traders would make requests to RBS's LIBOR submitters. The duration and extent of RBS's misconduct was exacerbated by its inadequate systems and controls. 8. RBS's misconduct undermined the integrity of LIBOR.