UK Edition
Bank of America's Merrill Lynch hit with £34.5m fine for breaking reporting rule
The City watchdog has fined US bank Merrill Lynch £34.5m for breaking a reporting rule put in place to boost transparency after the financial crisis.
Merrill Lynch International failed to report 68.5 million derivative trades in the two years to February 2016, the Financial Conduct Authority (FCA) said, breaking a rule put in place after the crisis to help authorities assess potential risk in financial markets.
While this is not the first time the bank has been slammed by the regulator for reporting failures - it faced a £13.3m fine in 2015 for incorrectly reporting 35m transactions and failing to report thousands of others - this is the FCA's first penalty of its kind under European Markets Infrastructure Regulation (Emir) rules.
"There needs to be a line in the sand," said Mark Steward, the FCA's executive director of enforcement and market oversight. "We will continue to take appropriate action against any firm that fails to meet requirements."
Mr Steward added: "Effective market oversight depends on accurate and timely reporting of transactions."
The fine was reduced by 30pc from its original sum of £49.3m after the firm agreed to settle at an early stage of the investigation, the FCA said.
It pointed out that the Merrill Lynch failed "to allocate adequate and sufficient human resource to undertake its obligations to report trading in exchange traded derivatives" under the Emir rules, one of the key reforms introduced after the crash.
A spokesman for Bank of America Merrill Lynch said the bank reported the matter to the watchdog when it discovered certain trades had not been fully reported, adding that no clients were financially impacted and its processes have since improved.