Hong Kong's Securities and Futures Commission (SFC) has reprimanded Royal Bank of Scotland for internal control failures and fined the bank £460,000.

The SFC said RBS had failed to detect and prevent unauthorized trades in its emerging markets rates business in the city in 2011, following the discovery of unauthorized trades by former trader Shirlina Tsang. Ms Tsang was sentenced to 50 months in jail last September after pleading guilty to fraud after she was caught falsifying records of her trades.

The SFC said RBS's systems and controls at the emerging markets rates business were inadequate and revealed "significant weaknesses in its procedures, management systems and internal controls".

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Mark Steward, the commission's director of enforcement, said the bank had avoided a stiffer penalty because of its co-operation. "RBS acted quickly in alerting the SFC on a Saturday afternoon which in turn led to action being taken that prevented Tsang from leaving Hong Kong. This deserves substantial credit and is the reason why today's sanctions are not heavier ones."

RBS said: "We put in place a comprehensive remediation programme that strengthened our governance and supervisory oversight, and our control environment. We are pleased that the SFC has acknowledged the immediate steps we took to alert them and the significant measures taken to enhance our internal controls."

According to the judgement when she was sentenced, Ms Tsang had worked for RBS since May 2004. She had booked irregular trades before 7pm in Hong Kong and then cancelled or amended the entries after the RBS systems calculated the profit or loss but before any settlement with a counterparty.