London: Britain’s financial regulator has fined Deutsche Bank AG £4.7 million (Dh28.6 million, $8 million) for wrongly reporting certain market transactions for nearly six years.
The Financial Conduct Authority said in a statement on Thursday the bank failed to accurately report all the contract-for-difference (CFD) equity swaps, totalling 29 million, it executed between November 2007 and April 2013.
CFDs allow a buyer to trade on movements in a market price without actually owning the underlying asset. Such trades must be reported to a regulator under European Union law.
“We have repeatedly highlighted the importance of accurate transaction reporting and taken enforcement action against a number of firms,” Tracey McDermott, director of enforcement at the FCA, said.
“There is simply no excuse for Deutsche’s failure to get this right. Other firms should be in no doubt about our continued focus on this issue,” McDermott said.
The regulator previously issued Deutsche with a private warning about similar transaction reporting failures, the FCA said.
Strength control framework
Deutsche Bank said it had identified a software coding issue for certain CFD and swap transactions in March 2013. “We immediately undertook a complete review of our transaction reporting systems to rectify the problem and strengthen our control framework,” the bank said in a statement.
The FCA said Deutsche’s failure to submit accurate transaction reports had the potential to hinder the regulator’s ability to detect and investigate suspected incidences of market abuse, insider trading and market manipulation.
“Given Deutsche’s size and the high volume of transactions that it failed to report accurately, the potential impact of the failures in this case was significant,” the FCA said.
The watchdog said it had given banks extensive guidance on how to submit and check reports.
Deutsche Bank is the 11th firm it has fined for transaction reporting breaches. The bank’s fine would have been 6.74 million pounds if it had not agreed to settle early with the FCA.
