Royal Bank of Canada signage is pictured in the financial district in Toronto, Friday, Sept. 8, 2023. The Ontario Securities Commission has approved a $10-million settlement with Royal Bank of Canada over issues with how it accounted for costs related to internal software development.THE CANADIAN PRESS/Andrew Lahodynskyj
TORONTO – The Ontario Securities Commission has approved a $10-million settlement with Royal Bank of Canada over issues with its tracking of costs related to internal software development.
The settlement, approved by the OSC’s Capital Markets Tribunal on Friday, covers deals the bank reached with the commission as well as with Quebec’s Autorité des marchés financiers and the U.S. Securities and Exchange Commission.
The payments, $8 million to the SEC and $2 million to the AMF, stem from the bank being deficient on its accounting controls and processes on software development between 2008 and 2020.
The regulators say RBC was not properly monitoring how much of its software development spending should be capitalized, and therefore considered assets, and what should be counted as expenses.
It says the bank, which increased its capitalized spending on software development from $658 million in 2011 to $1.3 billion in 2022, has taken corrective action on the deficiencies.
The OSC says it also found no evidence of dishonest or abusive conduct by the bank or loss to investors or material impacts on RBC’s financial statements.
This report by The Canadian Press was first published Nov. 3, 2023.
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