Citi to pay $1 million penalty for swap data reporting failures

According to the CFTC, Citi failed to correctly report legal entity identifier (LEI) information to a swap data repository (SDR).

Provisionally registered swap dealers Citibank N.A and Citigroup Global Markets have been ordered to pay a $1 million penalty for swap data reporting violations.

According to the order issued by the Commodity Futures Trading Commission (CFTC), the entities failed to comply with requirements for reporting legal entity identifier (LEI) information to a swap data repository (SDR).

The penalty follows an order entered by the regulator in 2017 ordering Citi to pay $550,000 due to its failures to report LEI data for swaps correctly to an SDR, as well as, failure to establish the electronic systems needed to report them correctly, to correct its errors in LEI reporting or perform its LEI swap reporting duties diligently.

The higher penalty issued by the CFTC yesterday follows a continuation of the failures noted in 2017 including misreporting counterparty identifiers and taking 18 months to complete upgrades to its systems.

“As this case demonstrates, the CFTC will vigorously pursue swap dealer registrants that fail to meet their reporting obligations and violate CFTC orders,” said the acting director of enforcement, Vincent McGonagle.

“Accurate swap data reporting is essential to fulfilment of the CFTC’s regulatory mandates, including monitoring systemic risk and preventing market abuse.”

The CFTC confirmed that the civil monetary penalty issued reflected a reduction that recognised the cooperation of Citi in its investigation.

It follows several other reporting-related fines being issued by regulators in the last few months after trade repositories DTCC and UnaVista received fines for breaches of the European Market Infrastructure Regulation (EMIR).
When asked for comment, a spokesperson from Citi said: “We are pleased to have resolved this matter.”