The Financial Services Authority (FSA) has fined the London branch of Commerzbank AG (Commerzbank) £595,000 for failing to provide accurate transaction reports to the FSA.
Firms are required to ensure they submit accurate data for reportable transactions by close of business the day after a trade is executed. The FSA uses this data to detect and investigate suspected market abuse: insider trading and market manipulation.
For two years Commerzbank either failed to report or reported inaccurately almost all of its reportable transactions. These breaches occurred despite the FSA sending repeated reminders to firms of their obligations to provide accurate data and the importance of compliance with the FSA rules on transaction reporting, and specific requests to Commerzbank for the firm to check its data.
Alexander Justham, director of markets, said:
"Complete and accurate transaction reports are an essential component of the FSA’s market monitoring work. Commerzbank’s reporting failures could have a damaging impact on our ability to detect and investigate suspected market abuse. Firms and their management must ensure they submit quality transaction reporting data."
The firm has taken a number of steps to address the concerns raised including commissioning a review of its transaction reporting process and committing extensive resources to improve its processes and resolve the errors.
Commerzbank co-operated fully with the FSA in the course of its investigation and agreed to settle at an early stage. In doing so it qualified for a 30% discount. Without the discount the fine would have been £850,000.