The Financial Services Authority (FSA) is fining the London branch of Germany's Commerzbank AG over half a million pounds for failing to provide accurate transaction reports. Firms need to report trades by close of business the day after a transaction is executed as the watchdog uses this data to detect and investigate suspected market abuse, such as insider trading and market manipulation.

For two years Commerzbank either failed to report or reported inaccurately almost all of its reportable transactions, says the FSA, necessitating the £595,000 fine. These breaches occurred despite the regulator sending repeated reminders to all firms about their obligations to provide accurate and timely transaction reporting data and, more damningly, the watchdog also specifically warned Commerzbank to check its data.

According to Alexander Justham, director of markets, at the FSA: "Complete and accurate transaction reports are an essential component of the FSA's market monitoring work and Commerzbank's reporting failures could have a damaging impact on our ability to detect and investigate suspected market abuse. Firms and their management must ensure they submit quality transaction reporting data," he added.

Commerzbank co-operated fully with the FSA in the course of its investigation and agreed to settle at an early stage. In doing so it qualified for a 30 per cent discount, reducing the fine from an initial £850,000. The firm maintains that it has now taken a number of steps to address the concerns raised by the FSA, including commissioning a review of its transaction reporting process and committing extensive resources to improve procedures and resolve the errors.

The case follows on from an instance earlier this month when the FSA fined three firms a total of £4.2 million - Credit Suisse, Getco and Instinet - for similarly failing to provide accurate and timely transaction reports (see HERE).

Share Story: