Deutsche Bank AG London Branch (Deutsche) has been fined £4,718,800 by the Financial Conduct Authority (FCA) for incorrectly reporting transactions between November 2007 and April 2013.
Deutsche failed to properly report 29,411,494 Equity Swap CFD (contracts for difference) transactions. The failure, which affected all Deutsche’s Equity Swap CFD transaction reports in this period, breaches FCA rules on transaction reporting.
Tracey McDermott, the FCA’s director of enforcement and financial crime, said:
''Effective market surveillance is critical to maintain the integrity of our markets and depends on accurate and timely reporting of transactions. Deutsche is a major market participant responsible for reporting millions of transactions every year. We have repeatedly highlighted the importance of accurate transaction reporting and taken enforcement action against a number of firms. 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."
The FCA’s overall objective is to ensure that markets work well and with integrity. Accurate and complete transaction reporting by firms is an essential tool in delivering this objective. The FCA uses these reports in a number of ways – including identifying and investigating suspected market abuse, for example insider trading and market manipulation. Where the FCA sees any evidence of firms not acting properly we will not hesitate to act.
We are particularly concerned because we have provided extensive guidance to firms on how to submit and check these reports, have already taken action against several other firms, and have previously issued Deutsche with a private warning in relation to other similar transaction reporting failures. The size of the fine reflects the very significant number of misreported transactions. Deutsche agreed to settle at an early stage of the investigation, and received a 30% reduction of their fine.
Notes for editors
- The final notice for Deutsche Bank AG[1].
- A transaction report is a data set submitted to the Authority that relates to an individual financial market transaction which includes, but is not limited to, details of the product traded, the firm that undertook the trade, the trade counterparty and the trade characteristics such as buy/sell indicator, price and the quantity concerned. Read more information about transaction reporting[2].
- The error was due to a coding issue which reversed the buy/sell indicator for all equity swap CFD transactions.
- Without the 30% discount, the fine would have been £6,741,215.
- To date, the FCA has fined ten other firms[3] for transaction reporting breaches: Barclays, Credit Suisse, Instinet, Getco, Commerzbank, Société Générale, City Index, James Sharp & Co, Plus500UK and RBS.
- On the 1 April 2013 the Financial Conduct Authority (FCA) became responsible for the conduct supervision of all regulated financial firms and the prudential supervision of those not supervised by the Prudential Regulation Authority (PRA).
- The FCA has an overarching strategic objective of ensuring the relevant markets function well. To support this it has three operational objectives: to secure an appropriate degree of protection for consumers; to protect and enhance the integrity of the UK financial system; and to promote effective competition in the interests of consumers.
- Find out more information about the FCA[4].