The systems and controls around marking the international equity derivatives books fell far short of those expected by the Financial Services Authority (FSA) for a business trading complex and high risk financial products, the FSA said.

Nomura breached two FSA principles as the firm failed to conduct its business with due skill, care and diligence and failed to take reasonable care to organize and control its affairs responsibly.

The FSA said that the failings were particularly serious because they were fundamental and systemic and persisted over a prolonged period of time, until they were identified by Nomura in June 2008.

Margaret Cole, the FSA's director of enforcement and financial crime, said: "Firms must ensure their systems and controls develop at the same rate their business operations grow; if this doesn't happen - as in Nomura's case - they run the risk of having systems that are inadequate for their business.

"Financial instruments must be valued correctly by traders and a firm's systems and controls must be able to minimize the risk of traders mismarking their positions. When a firm's systems and controls fall short of required standards, we will not hesitate to take action."

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