THE UK's financial watchdog has fined Merrill Lynch International £34.5 million for failing to report 68.5 million exchange traded derivative transactions, in what the watchdog said was the first fine of its kind.
The Financial Conduct Authority said the fine was related to unreported transactions that took place between February 12, 2014 and February 6, 2016 and was the first enforcement against a firm for this kind of activity under the European Markets Infrastructure Regulation (EMIR).
The fine for Merrill Lynch International had been cut down by 30% after the firm agreed to settle during an early stage of the investigation.
Without that discount, the firm would have faced a fine worth £49.3 million, the FCA said.
Mark Steward, the FCA's executive director of enforcement and market oversight said: "It is vital that reporting firms ensure their transaction reporting systems are tested as fit for purpose, adequately resourced and perform properly.
"There needs to be a line in the sand.
"We will continue to take appropriate action against any firm that fails to meet requirements."
Bank of America Merrill Lynch said in a statement that it had self-reported the issue to the UK watchdog, and assured that none of its clients have taken a financial hit.
"We are wholly committed to complying with all applicable regulatory requirements.
"When we discovered that certain trades had not been fully reported to a trade repository, as required following the introduction of EMIR, we immediately reported the matter to the FCA.
"We have re-evaluated and improved our related processes and can confirm that no clients were financially impacted as a result."
Why are you making commenting on The Herald only available to subscribers?
It should have been a safe space for informed debate, somewhere for readers to discuss issues around the biggest stories of the day, but all too often the below the line comments on most websites have become bogged down by off-topic discussions and abuse.
heraldscotland.com is tackling this problem by allowing only subscribers to comment.
We are doing this to improve the experience for our loyal readers and we believe it will reduce the ability of trolls and troublemakers, who occasionally find their way onto our site, to abuse our journalists and readers. We also hope it will help the comments section fulfil its promise as a part of Scotland's conversation with itself.
We are lucky at The Herald. We are read by an informed, educated readership who can add their knowledge and insights to our stories.
That is invaluable.
We are making the subscriber-only change to support our valued readers, who tell us they don't want the site cluttered up with irrelevant comments, untruths and abuse.
In the past, the journalist’s job was to collect and distribute information to the audience. Technology means that readers can shape a discussion. We look forward to hearing from you on heraldscotland.com
Comments & Moderation
Readers’ comments: You are personally liable for the content of any comments you upload to this website, so please act responsibly. We do not pre-moderate or monitor readers’ comments appearing on our websites, but we do post-moderate in response to complaints we receive or otherwise when a potential problem comes to our attention. You can make a complaint by using the ‘report this post’ link . We may then apply our discretion under the user terms to amend or delete comments.
Post moderation is undertaken full-time 9am-6pm on weekdays, and on a part-time basis outwith those hours.
Read the rules here