Securities Law Daily provides daily coverage of developments in the regulation of federal, state, and international securities and futures trading, with objective coverage of the...
By Richard Hill
Aug. 18 — Deutsche Bank AG's swap dealer unit failed to report required data for five days earlier this year and continues to report incomplete and late information, violating a CFTC order, the agency said ( CFTC v. Deutsche Bank AG, S.D.N.Y., No. 1-16-cv-06544, 8/18/16 ).
The reporting issues are affecting swaps market data offered to the public as well as the CFTC's ability to monitor the multi-trillion dollar marketplace, the Commodity Futures Trading Commission said Aug. 18.
The bank, a provisionally registered swap dealer for nearly four years, experienced a system outage in April that prevented it from reporting the data, the CFTC said in a complaint in the U.S. District Court for the Southern District of New York. The outage occurred in part because the company didn't have an adequate business continuity and disaster recovery plan, the agency said.
The outage “exacerbated existing problems” and led to the discovery and creation of new problems, the CFTC said. Several of the problems continue to exist, affecting particularly the reporting of foreign exchange swaps data, the commission said.
During the outage, Deutsche Bank switched from its regular data reporting platform to a backup platform in a planned effort to update the main system. The backup “disaster recovery platform” contained corrupted files, however, making it unusable. When the bank switched back to the main platform, some of the corrupted files were transferred, according to the CFTC, shutting down the entire system and causing the reporting blackout. Subsequent updates to the reporting system have caused additional reporting delays, the CFTC said.
In September 2015, Deutsche Bank agreed to pay a $2.5 million fine to settle CFTC allegations it failed to properly report swaps transactions for approximately two-and-a-half years, causing misinformation to be relayed to the marketplace in real time (190 SLD, 10/1/15). As part of the settlement, the bank agreed to improve its internal controls to ensure the accuracy and integrity of its swaps data reporting and to cease reporting violations.
The CFTC is seeking a fine, to compel compliance with the September order and to immediately appoint a monitor for the bank, which Deutsche Bank has agreed to, according to the agency. Deutsche Bank's attorney Kenneth Raisler, Sullivan & Cromwell, New York, declined to comment when reached by telephone.
To contact the reporter on this story: Richard Hill in Washington at email@example.com
To contact the editor responsible for this story: Phyllis Diamond at firstname.lastname@example.org
The complaint can be seen at http://www.bloomberglaw.com/public/document/US_Commodity_Futures_Trading_Commission_v_Deutsche_Bank_AG_Docket.
Copyright © 2016 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)