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Release Date: 23rd October 2017

To access the original FCA document, click here.

Summary

The Financial Conduct Authority (FCA) has fined Merrill Lynch International (MLI) £34,524,000 for failing to report 68.5 million exchange-traded derivative transactions between 12 February 2014 and 6 February 2016. This is the first enforcement action for such a breach under the European Markets Infrastructure Regulation (EMIR), underscoring the FCA’s emphasis on transaction reporting.

MLI’s failure to report these transactions hindered the authorities’ ability to assess and address risks within the financial system. The reporting requirement was introduced post-2008 financial crisis to enhance market transparency. Although MLI cooperated with the FCA’s investigation and swiftly took steps to remediate the issue, this was not their first related reporting failure.

Mark Steward, FCA Executive Director of Enforcement and Market Oversight, highlighted the necessity for accurate and timely transaction reporting, stressing that firms must ensure their reporting systems are fit for purpose and adequately resourced.

MLI agreed to an early settlement, earning a 30% reduction in their fine, which would have otherwise been £49,320,000.

Key Takeaways for Other Firms:

In conclusion, the FCA’s substantial fine on Merrill Lynch International serves as a stark reminder of the critical importance of compliance with transaction reporting regulations to maintain transparency and integrity within financial markets.

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