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August 29, 2014updated 04 Apr 2017 2:02pm

FCA fines Deutsche Bank £4.7 million over reporting failures

UK's financial regulator (FCA) has fined Deutsche Bank £4.7 million for reporting over 29 million incorrect transactions from November 2007 until April 2013.

By Verdict Staff

UK’s financial regulator (FCA) has fined Deutsche Bank £4.7 million for reporting over 29 million incorrect transactions from November 2007 until April 2013.

FCA claimed that the bank failed to accurately report all the equity swap contract-for-difference (CFD) transactions of nearly 30 million, it executed over a six-year period between November 2007 and April 2013.

The failure was the result of a coding issue that reversed the buy/sell indicator for the bank’s equity swap CFD transactions reporting procedures.

According to FCA, Deutsche Bank’s failure to submit accurate transaction reports had the potential to hinder the regulator’s ability to detect and probe suspected incidences of market abuse, insider trading and market manipulation.

The FCA uses transaction reports in a number of ways, including identifying and investigating suspected market abuse.

The equity swap contracts for difference will allow traders to bet on stock price movements without owning the underlying shares.

The bank has agreed to resolve the issue at an early stage of the investigation, and its fine was reduced by 30% from £6.7 million.

The FCA said it the bank has been given a private warning in June 2010 regarding similar transaction reporting breaches. The regulator had already provided banks extensive guidance on how to submit and check reports.

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," he added.

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