REGULATION

Reporting software failures sees Morgan Stanley fined in the US

Morgan Stanley has been fined a total of $350,000 after the CFTC found it had omitted data from its Large Trader reports.

By Hayley McDowell hayley.mcdowell@strategic-i.com November 06, 2017 2:24 PM GMT

Issues with proprietary reporting software used by Morgan Stanley have led to the investment bank being fined $350,000 in the US.

The Commodity Futures Trading Commission (CFTC) ordered the penalty after finding Morgan Stanley had omitted data required as part of Large Trader reports.

Rules require futures commission merchants (FCM) to report certain futures and options positions to the CFTC, commonly referred to as Large Trader reports, so the regulator can evaluate potential markets risks and monitor compliance.

The CFTC explained Morgan Stanley omitted mandatory futures and options data from its Large Trader reports between 2007 and 2017.

“These omissions were the result of four distinct problems with Morgan Stanley's proprietary reporting software. Each one of these software issues caused required data to be omitted,” the CFTC said.

The authority added that Morgan Stanley self-reported the problems and then provided substantial and detailed information on the failures.

“Morgan Stanley promptly remediated these reporting deficiencies, and proactively implemented processes to ensure similar problems will not recur. The civil monetary penalty imposed has been significantly reduced on account of this cooperation,” the CFTC concluded.