CFTC Hands SocGen Fine for FX Reporting Failure

The US Commodity Futures Trading Commission (CFTC) has fined Société Générale $450,000 for failures in the reporting of certain FX transactions.

The CFTC says that the French bank failed to properly report certain NDF transactions to a swap data repository (SDR), and failed to report to an SDR a large number of FX swap, FX forward, and NDF transactions in a timely manner, in violation of the Commodity Exchange Act (CEA) and CFTC Regulations. 

Therefore, the CFTC announced an order today requiring Société Générale to pay a $450,000 civil monetary penalty and to cease and desist from committing further violations of the CEA and CFTC Regulations.

The order notes that the accuracy and completeness of swap reporting are critical to the commission’s mission to protect market participants and to ensure market integrity. 

In particular, the order states that the CEA requires parties to a swap transaction to report swap transaction information to a registered SDR in a timely manner, and requires swap dealers to report swap transactions to an SDR within such time period as prescribed by the CFTC. 

The order further states that CFTC Regulations 43 and 45 specify requirements for real-time public reporting, public availability of swap transaction and pricing data, and reporting of creation and continuation data to an SDR. 

The CFTC says that in July 2014, the bank implemented a software update to its FX trading platform that led to the trading platform incorrectly coding Société Générale’s counterparty as the reporting counterparty for certain FX swap, FX forward, and non-deliverable forward transactions, which resulted in no reports being made to the SDR regarding the swaps. 

Allegedly, Société Générale did not discover the error until January 2015, and it was not until April 2015 that it was able to fix it. The order issued by the commission finds that the bank initiated a project to identify trades affected by the coding error, and in September 2015 notified CFTC staff about its failure to report. 

Société Générale then apparently back-loaded approximately 51,821 unreported transactions in October 2015, and in April and May 2016 made submissions to its SDR for approximately 2,024 non-deliverable forward transactions.

The CFTC says that it recognises that Société Générale cooperated with the investigation by self-reporting its errors, undertaking an internal investigation, and taking remedial action to correct its reporting failures.

galen@profit-loss.com

@Galen_Stops

@Profit_and_Loss

Galen Stops

Share This

Share on facebook
Facebook
Share on google
Google+
Share on twitter
Twitter
Share on linkedin
LinkedIn
Share on reddit
Reddit

Related Posts in