Dive Brief:
- BNY will pay $5 million for swap reporting and supervision failures and violation of an earlier Commodity Futures Trading Commission order, the agency said Monday.
- The bank consistently misreported more than 5 million swap transactions between 2018 and 2023, and inadequately supervised its swap dealer operations — particularly those in swap data reporting and associated persons monitoring, the CFTC said. Some reporting failures included violations of a 2019 CFTC order against BNY.
- Monday’s order was issued against BNY “for repeatedly failing to correctly report millions of swap transactions to a registered swap data repository,” the CFTC said in a statement.
Dive Insight:
In September 2019, the CFTC fined BNY $750,000 for several violations related to swap reporting between Dec. 31, 2012, and at least 2018. BNY was required to stop violating some of the same sections of the Commodity Exchange Act and CFTC regulations that are part of the current order, the agency noted Monday.
Additionally, the New York City-based bank needed written policies or procedures to help monitor the voice or e-communications of associated persons in languages other than English to track whether they comply with the CEA and CFTC regulations, the order said.
“BNY takes its regulatory responsibilities seriously and is pleased to have resolved this matter,” a spokesperson for the lender told Banking Dive via email Tuesday.
The CFTC reduced BNY’s penalty amount because the bank self-reported. The agency acknowledged the lender’s rectifying efforts, including its decision to retain an independent compliance consultant to review and assist the firm in its related program. The bank also cooperated with the division of enforcement’s investigation, the agency noted.
“Accurate reporting is a core pillar of the regulatory regime for swaps, and every individual data field matters,” Ian McGinley, director of the division of enforcement, said in a statement Monday. “It is essential that swap dealers get this right.”
BNY is hardly the first bank to get fined for reporting errors. Last September, the CFTC ordered Goldman Sachs, Bank of America, and JPMorgan Chase to pay $53 million over swap reporting and data infrastructure requirements. Goldman was hit with the largest penalty — $30 million — while JPMorgan and Bank of America took $15 million and $8 million hits, respectively.
The Dodd-Frank Act of 2010 required financial firms to report all swap transactions, whether cleared or uncleared, to registered swap data repositories.
“It now has been 13 years since Dodd-Frank and well past time for swap dealers to ensure they are in full compliance with the CEA and CFTC regulations,” McGinley said last year, when announcing the Goldman, JPMorgan and BofA fines. “As significant reporting failures continue to persist, our resolutions will reflect the gravity of swap dealers’ continuing failures to prioritize compliance and seek to deter future failures.”
