Deutsche Bank has been fined £4.7m by the Financial Conduct Authority for incorrectly reporting transactions between November 2007 and April 2013.
The bank failed to properly report around £30m equity swap ‘contracts for difference’ transactions, according to a statement. The failure affected all Deutsche Bank’s equity swap CFD reports during the near six-year period and breaches FCA rules on transaction reporting.
CFDs are derivative products that are designed to allow investors to bet on price movements, by providing a return based on the difference between the opening and closing price are a given security or market.
Deutsche is not the first major banking group to be pulled up for transaction reporting. Last year, state-backed Royal Bank of Scotland was fined more than £5.6m for incorrectly reporting transactions made in wholesale markets and in some instances failing to report transactions at all.
RBS failed to properly report 44.8m transactions between November 2007 and February 2013, and failed altogether to report 804,000 transactions between November 2007 and February 2012, the FCA said at the time.
Contracts for difference have been the cause of enforcement action previously. In 2012 the then Financial Services Authority fined CFD trading platform Plus500UK and stockbroker James Sharp and Company a total of more than £250,000 for similar reporting failings.
In June of that year, the regulator also fined investment firm Accendo Markets £56,000 for failing to keep accurate records on CFDs, while earlier in April FTAdviser had reported on the collapse of Scottish broker firm Direct Sharedeal, which had been fined over mis-leading CFD sales pitches by an appointed representative.
Tracey McDermott, director of enforcement and financial crime at the FCA, said: “Effective market surveillance is critical to maintain the integrity of our markets and depends on accurate and timely reporting of transactions.
“Deutsche is a major market participant responsible for reporting millions of transactions every year. We have repeatedly highlighted the importance of accurate transaction reporting and taken enforcement action against a number of firms.
“There is simply no excuse for Deutsche’s failure to get this right. Other firms should be in no doubt about our continued focus on this issue.”
