Three of America’s largest banks are being hit by the Commodity Futures Trading Commission (CFTC) for failing to properly report millions of transactions in the swap market.
So have JPMorgan Chase, Bank of America and Goldman Sachs ordered pay $15 million, $8 million and $30 million in fines, respectively.
According to the CFTC, Goldman Sachs was fined for “unprecedented failures” related to swap data reporting and disclosure of Pre-Trade Mid-Market Marks (PTMMMs).
The CFTC requires swap dealers such as Goldman Sachs to provide PTMMMs so that counterparties can make informed decisions regarding entering into the swap. The rule stems from the Dodd-Frank Act of 2010.
Since the rule went into effect more than 13 years ago, the CFTC says Goldman has violated the regulations more than a million times.
“Although Goldman has back-reported more than 20 million swaps to date, the CFTC believes this figure significantly underestimates the true extent of Goldman’s swap data reporting errors. In addition, the order states that since 2013, Goldman has provided counterparties with PTMMMs that were inaccurate or failed to fully provide a PTMMM more than one million times.”
The CFTC says JPMorgan failed to report data relevant to currency swaps. According to the press release, the bank did not report more than 150,000 spot currency transactions and also misclassified certain transactions, effectively leaving them unreported.
As for Bank of America, the CFTC says the group failed to report nearly four million swap transactions to data repositories or properly.
“These reporting errors were caused by 25 types of errors primarily related to swap assignments which are (normally) post-trade events where an agent assigns a portion of an executed swap to clients who are the actual counterparties to the original transaction.
The order also takes place [Bank of America] did not exercise sufficient oversight to ensure timely compliance with their swap dealer data activity and reporting obligations under the CEA and CFTC regulations as of approximately 2015.”
Bank of America and JPMorgan admitted the charges as part of their swap settlements, but Goldman Sachs did not.
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