UBS was fined £30m by Britain's financial watchdog and put under extra scrutiny by its Swiss counterpart over failings that allowed a rogue trader to lose $2.3 billion.
Britain's Financial Services Authority said the Swiss bank's risk control systems were "seriously defective."
Kweku Adoboli, a UBS trader in London, was jailed for seven years last week after admitting the biggest fraud in British history.
"Failures of this type in firms of the size and standing of UBS not only damage the firms concerned but also wider confidence in the integrity of the markets and the financial system," the FSA's Tracey McDermott said.
In a separate announcement, the Swiss financial regulator Finma said it was examining whether UBS should increase capital to back its operational risks. A Finma spokesman declined to elaborate.
Since the government bailed out UBS during the 2008 financial crisis, Switzerland has drawn up tough new capital standards for its two global banks - UBS and Credit Suisse
- that go beyond standards agreed by regulators and bankers and enshrined in the Basel III agreement.
UBS said it had made progress over the past year "reinforcing our position as one of the most financially sound global banks."
The Swiss regulator said it is appointing an independent investigator to see whether the action UBS is taking to put things right after last year's scandal is proving effective.
Finma said the bank's control functions had been based too much on trust and that it had sent misleading signals by awarding bonuses and pay rises to Adoboli, even though he had breached the rules.
UBS said it accepted the regulators' findings and the penalties, adding it was pleased that the regulators had acknowledged the steps the bank has taken including disciplinary action against staff.
UBS Chief Executive Sergio Ermotti, installed after Oswald Gruebel stepped down over the scandal, announced a major restructuring last month to wind down large, risky parts of its investment bank.
