Release Date: 22nd April 2015

To access the original FCA document, click here.

Summary

Who was fined:

• Merrill Lynch International (MLI)

Why the FCA fined them:

• The FCA fined MLI £13,285,900 for incorrectly reporting 35,034,810 transactions and failing to report another 121,387 transactions between November 2007 and November 2014.
• The severity of MLI’s misconduct and their failure to address the root causes despite previous warnings and fines contributed to the high penalty.
• The FCA used a penalty of £1.50 per line of incorrect or non-reported data for the first time, reflecting the need for a credible deterrent.

Key Takeaways for Other Firms:

• Accurate Transaction Reporting: Ensure all transaction reports are accurate and complete to comply with FCA regulations.
• Prompt Issue Resolution: Address root causes of reporting failures promptly to avoid repeated non-compliance.
• Understand Regulatory Guidance: Stay updated and compliant with FCA guidance and enforcement actions.
• Invest in Compliance Systems: Invest in robust compliance systems to prevent and detect reporting failures.
• Early Settlement Cooperation: Cooperate early in FCA investigations to potentially reduce fines.

By adhering to these principles, firms can avoid significant regulatory penalties and contribute to market integrity.