City Index Pays FSA £490,000 for Missing Transaction Reports
The Financial Services Authority (FSA) has handed out financial penalty of £490,000 to City Index Ltd for failing to submit nearly 2 million transaction reports good for two years, or 60 percent of its total reportable transaction reports.
The FSA alleged that from November 2007 to September 2009 City Index did not disclose about 55,000 transaction reports while data fields of nearly 1,970,000 transaction reports were represented inaccurately. Margaret Cole, managing director of enforcement and financial crime, said the failure to disclose accurate transaction reports could impair FSA’s investigation into abuses in the market, thus a breach of FSA’s policies.
“Firms and their management must ensure they submit quality transaction reporting data and we encourage all firms to review the integrity of this data on a regular basis,” Cole added.
In a Final Notice sent by FSA to City Index, the authority argued that companies need to submit transaction reports to “enable the FSA to meet its statutory objectives of maintaining market confidence and reducing financial crime. The primary function for which the FSA uses transaction reports is to detect and investigate suspected insider trading and market manipulation.”
FSA further claimed that City Index violated its Principles for transaction reporting when the firm failed to establish mechanisms to ensure the validity and accuracy of transaction reports. City Index “failed to identify fundamental errors in its transaction reporting process upon the implementation of a new trading platform,” the FSA said.
City Index has already commissioned an independent body that will take a look into its financial reporting processes and implement remedial actions.