UBS has been ordered to cap bonuses for foreign-exchange and precious-metals bankers as Switzerland's regulator probes 11 of the bank's current and former employees as part of its inquiry into currency rigging.

The Swiss Financial Market Supervisory Authority, or Finma, is investigating the spot-trading desk based near Zurich, where the investment bank is located.

The unit employed about 14 people in the period under probe, and Finma is questioning individuals including senior managers of foreign-exchange and precious-metals trading, it said.

The measures, which include 134 million Swiss francs (€111 million) in profit that Finma ordered UBS to repay, the highest levied by the regulator, are part of the firm’s settlement of an international probe that also involved five UK and U.S. banks.

UBS was fined £233.8 million by the UK’s Financial Conduct Authority and $290 million by the US Commodity Futures Trading Commission today, leaving it with the steepest bill of the banks named in the settlements.

“People need to feel that there are serious personal sanctions,” Tim Dawson, a banking analyst at Helvea in Geneva, said today. “What they’re trying to say is you behave badly, you will get caught.” Finma capped variable compensation for UBS’s foreign-exchange and precious metals employees to 200 per cent of basic salaries for two years and UBS will be obliged to automate at least 95 per cent of its foreign-exchange trading.

It also said UBS will introduce a review and approval process for other employees at the investment bank in Switzerland whose bonuses are larger than twice their basic salaries. UBS, based in Zurich, has said previously it is taking “appropriate action” against employees as a result of its own investigation into foreign exchange.

The company today said it doesn’t know the identity of the 11 employees under probe. About 90 per cent of its currency trading is currently automated, the bank said. Less than 40 people at the investment bank in Switzerland and foreign exchange business globally will be affected by Finma’s actions on bonuses, a person with knowledge of the matter said. Mark Branson, who took the helm at Finma in April, is taking a tougher approach than his predecessors in tackling financial wrongdoing.

Branson, a former UBS and Credit Suisse employee, said in a speech last month that Finma would crack down more heavily on individuals so that they "know they have something to lose" given sanctions on institutions were not having the desired effect.

Bloomberg