Merrill Lynch fined $45.5M for failing to report transactions

Marco Green
October 23, 2017

(Kitco News) - Bank of America's Merrill Lynch unit has been fined more than $45.5 million by the U.K.'s Financial Conduct Authority for failing to report 68.5 million exchange-traded derivative transactions between February 12, 2014 and February 6, 2016.

These transactions represented contracts with values that were agreed upon based on underlying indexes, securities and assets.

The reporting requirement was a key reform following the 2008 financial crisis.

Merrill Lynch International, part of US giant Bank of America Merrill Lynch, would have been required to pay £49.32 million had it not settled at an early stage of the investigation, the FCA said.

Reporting of these transactions are of much importance because the process gives help to authorities as a way to assess and to address the risk inherent in the financial system caused from a lack of overall transparency said the market regulator. Without this discount the fine would have been £49,320,000. "The obligations under EMIR, as with Markets in Financial Instruments Directive, are key aspects of such oversight".

Bank of America Merrill Lynch said in a separate statement that it had self-reported the issue to the United Kingdom watchdog, insisting that none of its clients had been financially impacted.

The bank has been accused of failing to report 68.5 million exchange traded derivative transactions between 12 February 2014 and 6 February 2016.

The FCA applauded Merrill Lynch for being "open and co-operative" and taking quick action, but noted the bank had been linked to two earlier transaction reporting cases.

'It is vital that reporting firms ensure their transaction reporting systems are tested as fit for goal, adequately resourced and perform properly. "We will continue to take appropriate action against any firm that fails to meet requirements", he said.

Other reports by Click Lancashire

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