FCA fines Merrill Lynch £34.5 million for transaction reporting failures

Fine is the first enforcement action against a firm for failing to report exchange traded derivatives under EMIR.

Merrill Lynch has become the first firm to be slapped with a £34.5 million fine for failing to report transactions of exchange traded derivatives under European Markets Infrastructure Regulation (EMIR).

The Financial Conduct Authority (FCA) said the fine reflects the important the regulatory puts on this type of reporting requirement, which was one of the key reforms introduced after the financial crisis in 2008.

Merrill Lynch cooperated with the FCA in its investigation and took steps to correct the breach, although the firm has been subject of two other investigations related to transaction reporting. 

Mark Steward, executive director of enforcement and market oversight at the FCA, explained accurate and timely reporting of transactions under EMIR and MiFID are key aspects of market 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,” he said.

Merrill Lynch agreed to settle at an early stage on the investigation, leading to a 30% reduction in the overall fine, which would have been almost £50 million.