* Bank ends monitorship by New York DFS
* Still faces probe, possible fine over compliance failings
* Bank had failed to stop Iran-related financial transactions (Adds further details, StanChart statement)
LONDON, Nov 21 (Reuters) - New York's Department of Financial Services (DFS) will end a period of monitoring of Standard Chartered on Dec. 31, the DFS said on Wednesday, bringing to a close one strand of the bank's punishment for past failings in compliance controls.
Standard Chartered agreed to the supervision with the regulator in 2012 as part of a wider settlement with U.S. authorities in relation to the bank's dealings with Iran-related entities. The bank agreed an extension to that deal, which saw an indepedendent monitor installed in the bank to check on progress in improving controls, in 2014 and again in April 2016.
That last extension was set to expire on Dec. 31 this year, but the news that there are to be no further extensions to the monitorship will be welcomed by StanChart bosses as they seek to convince U.S. authorities they have learned from past mistakes.
The bank's problems over failing in the past to prevent customers from breaching Iran-related sanctions are not over.
StanChart faces a separate investigation by U.S. authorities into the extent to which it allowed clients with Iranian interests to conduct transactions after 2007, as well as the extent to which it shared such dealings with authorities at the time of the 2012 settlement.
The end of the monitorship announced on Wednesday has no bearing on that investigation, StanChart said in a regulatory filing.
Media reports in October said the bank could face a further $1.5 billion fine for those violations, in addition to the $667 million it paid in 2012 to settle alleged breaches between 2001 and 2007.
The reports said the fine amount was a preliminary assessment based on some of the communications between the bank and regulators.
StanChart CEO Bill Winters in an internal email to staff in October criticised media coverage of the bank's efforts to improve its controls. (Reporting by Lawrence White; Editing by Adrian Croft and David Evans)