The Financial Services Authority has fined three major firms a total of £4.2 million for failing to provide “accurate and timely transaction reports” to the regulator.
Credit Suisse, electronic market maker Getco Europe Limited, and agency broker Instinet Europe Limited were fined for multiple breaches which led to the forms not being submitted promptly and correctly.
The companies received fines of £1.75 million, £1.4 million and £1.05 million, respectively. The FSA said that the total was reduced by 30 percent from £6 million because the firms cooperated fully during the investigations. Credit Suisse would otherwise have faced a £2.5 million penalty.
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 possible market abuse, such as insider trading and market manipulation.
All three firms committed multiple breaches that resulted in the transaction report failings. In addition, Instinet breached FSA principles by not having adequate systems and controls in place to meet the transaction reporting requirements. It also failed to take adequate steps to review its processes and the accuracy of its transaction report data.
According to the FSA, all three firms could have prevented the breaches by carrying out regular reviews. However, the firms ignored repeated reminders from the FSA during 2007 and 2008.
The firms have now resubmitted reports to the FSA where necessary, after taking steps to improve their processes and resolve any errors.
Alexander Justham, director of markets, said:"Firms must meet their obligation to provide accurate and timely data. 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."
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