The Financial Services Authority (FSA) has fined the London branch of Société Générale (SocGen) £1,575,000 for failing to provide accurate transaction reports to the FSA. The fine reflects the seriousness of SocGen’s failure to submit accurate reports for approximately 80% of its reportable transactions, across all of its asset classes, for a period of over two years.
Firms are required to ensure they submit 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 including insider trading and market manipulation.
SocGen also breached FSA rules by failing to retain and have available all relevant transaction reporting data. Firms must keep all data related to financial transactions and make it available to the FSA for at least five years.
Between November 2007 and February 2010, SocGen either failed to report, or inaccurately reported, 18.8 million of its 23.5 million reportable transactions. These breaches occurred despite the FSA sending repeated reminders to firms of their obligations to provide accurate data and of the importance of compliance with the FSA rules on transaction reporting.
Margaret Cole, director of enforcement and financial crime, said:
"This is the sixth case in the last year where we have taken action against a firm for failures to make accurate transaction reports. We will continue to monitor the quality of firm reporting and we are committed to taking action where necessary to ensure firms comply with their reporting obligations.
"SocGen failed to accurately report a very high proportion of its transactions for a significant length of time. This failure is a serious breach of our rules as it can 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 and we encourage all firms to review the integrity of this data on a regular basis."
The firm has taken a number of steps to address the concerns raised including commissioning a formal review of its transaction reporting process and committing resources to improve its processes and resolve the errors.
SocGen 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 £2.25 million.