FSA slaps £4.2 million fines on three firms for transaction reporting breaches
08 April 2010 | 11271 views | 0
The Financial Services Authority (FSA) has fined Credit Suisse, Getco and Instinet a total of £4.2 million for transaction reporting failures.
Firms are required to have systems and controls in place 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 such as insider trading and market manipulation.
All three firms were found to have committed "multiple breaches", with the largest fine slapped on Credit Suisse at £1.75 million. Electronic market maker Getco picked up a penalty of £1.45 million, while agency broker Instinet was fined £1.05 million.
Instinet was also found to be in breach of FSA Principles as the firm "did not have adequate systems and controls in place to meet the transaction reporting requirements and failed to take adequate steps to review its processes and the accuracy of its transaction report data".
Each firm could have prevented the breaches by carrying out regular reviews of its data, says the watchdog. Despite repeated reminders from the FSA during the course of 2007 and 2008, none of the firms did this.
Alexander Justham, director of markets, says: "This data is vital in our efforts to combat financial crime and we will continue to pursue firms that fail to provide quality data.
"Firms and their management must ensure they implement and operate systems and controls that are able to ensure quality transaction reporting. The standard of regulatory reporting by these firms fell far short of what the FSA expects and requires."
In return for their co-operation with the investigation, each firm qualified for a 30% discount. Without the discounts the total fines would have been £6 million.