FCA fines Merrill Lynch £34.5m over unreported transactions

This is the first enforcement action against a firm for failing to report details of trading in exchange traded derivatives, under the European Markets Infrastructure Regulation.

Reporting exchange traded derivative transactions helps authorities assess and address the risk inherent in financial systems caused by a lack of transparency. The reporting requirement was one of the key reforms introduced following the financial crisis in 2008 to improve transparency within financial markets.

In a statement, the FCA said that while MLI were o"pen and co-operative" in assisting in its investigation and quickly took steps to remediate the breach, it was also the subject of two earlier and related transaction reporting cases.

MLI agreed to settle at an early stage of the investigation and received a 30% reduction in their overall fine.

Mark Steward, FCA Executive Director of Enforcement and Market Oversight, said: “Effective market oversight depends on accurate and timely reporting of transactions. The obligations under EMIR, as with MiFID, are key aspects of such oversight.  

“It is vital that reporting firms ensure their transaction reporting systems are tested as fit for purpose, adequately resourced and perform properly. There needs to be a line in the sand. We will continue to take appropriate action against any firm that fails to meet requirements.”