Another Week, Another Fine
This week the Finance Conduct Authority fined a large investment bank for misreporting more than 220.2 million transactions over a 9 ½ year period, the news comes less than a fortnight since a Swiss bank suffered the same fate. It seems that the FCA is on a roll to punish firms for misreporting under the MiFID I regime. To date, a total of 14 firms have been fined and the penalties have been significant!
Many senior managers will now undoubtedly be thinking that the FCA’s rush to penalise the larger investment firms for misreporting transactions under the old regime is a shot across the bow ahead of the MiFID II inspections many anticipate later this year.
It is particularly noteworthy that the MiFID I penalties were dealt out for misreporting of transactions, the FCA clearly sees this as the low hanging fruit of the regulation.
Mark Steward (the FCA’s Executive Director of Enforcement and Market Oversight) is quoted as saying: ‘The failings in this case demonstrate a failure over an extended period to manage and test controls that are vitally important to the integrity of our markets. These were serious and prolonged failures. We expect all firms will take this opportunity to ensure they can fully detail their activity and are regularly checking their systems so any problems are detected and remedied promptly, unlike in this case.’
In light of these comments, firms will now – more than ever – focus on creating a control framework to ensure complete and accurate reporting of their transactions.