Release Date: 28th March 2019
To access the original FCA document, click here.
Summary
The Financial Conduct Authority (FCA) has fined Goldman Sachs International (GSI) £34,344,700 for significant failings in transaction reporting between November 2007 and March 2017. This penalty results from GSI’s failure to provide accurate and timely reports for 213.6 million reportable transactions, while erroneously reporting 6.6 million transactions that were not reportable. In total, GSI made 220.2 million errors in its transaction reporting, violating FCA rules.
Mark Steward, FCA Executive Director of Enforcement and Market Oversight, stated that the prolonged and serious failures demonstrated a lack of management and testing controls crucial to market integrity. He emphasised the importance of firms ensuring the accuracy and completeness of their transaction reporting systems.
The FCA found that GSI failed to take reasonable care to organise and control its transaction reporting processes effectively. These failures were linked to aspects of GSI’s change management processes, maintenance of counterparty reference data, and testing of transaction report accuracy and completeness.
GSI agreed to resolve the case, qualifying for a 30% discount on the penalty, which otherwise would have been £49,063,900.
Key Takeaways for Other Firms:
- Implement Robust Systems and Controls: Ensure systems can accurately report transactions and are regularly tested for reliability.
- Regular Monitoring and Testing: Continuously check and maintain the accuracy and completeness of transaction reports.
- Effective Change Management: Properly manage and update reporting processes and data to comply with regulatory requirements.
- Responsibility and Accountability: Take reasonable care to organise and control reporting processes responsibly and effectively.
In conclusion, GSI’s substantial fine underscores the necessity for firms to maintain precise and comprehensive transaction reporting systems. Proper oversight, rigorous testing, and effective management are essential to comply with FCA regulations and uphold market integrity.
Back to the Dear CEO letter archives.