The Commodity Futures Trading Commission has announced settling charges against Refinitiv US SEF LLC for failing to report certain categories of swap data. Refinitiv was imposed a $650,000 monetary penalty and will have to comply with certain undertakings.
The CFTC found that between February 2016 and August 2020 Refinitiv failed to report certain primary economic terms for 320,000 swap transactions, as required by the Commodity Exchange Act and CFTC regulations.
The regulator discovered that Refinitiv designed its reporting system to meet the specifications of its Swap Data Repository, which identified some of the CFTC requirements as optional.
As a result, the company failed to report certain swap creation data for hundreds of thousands of trades. The missing swap creation data included the financial entity status and the US person indicator for each counterparty.
The CFTC determined that Refinitiv had to know or had reasons to suspect there were reporting omissions. The Commission gave as an example the company’s 2013 annual Chief Compliance Officer Report where the failures and omissions in its reporting should have become obvious.
Refinitiv completed a compliance review of its reporting systems 10 months ago during its application for full registration and failed to detect its ongoing reporting failures. The company only addressed these issues after they were reported by two of its clients, then Refinitiv self-reported the ongoing violations to the CFTC.
The regulator stated:
The order recognizes Refinitiv’s self-reporting, cooperation, and remediation in the form of a substantially reduced civil monetary penalty.
