22 August 2016
Washington DC
Reporter: Drew Nicol

Deutsche Bank accused of new reporting violations


Deutsche Bank is facing fresh charges of swaps data reporting violations after the US Commodity Futures Trading Commission (CFTC) accused the bank of reporting late and incorrect swaps data for multiple asset classes over a five-day period.

The CFTC has confirmed it is pursuing a civil monetary penalty and a permanent injunction against the bank for what it considers to be persistent violations of its data reporting requirements.

The civil complaint was filed in the US District Court for the Southern District of New York and claimed that the bank failed to submit any swaps data for some transactions. The complaint also accused the bank of having an “inadequate” business continuity and disaster recovery plan.

The commission also raised allegations that Deutsche Bank is in violation of a CFTC order from September 2015 relating to previous failures by the bank to report swaps data due to its faulty reporting infrastructure.

According to the CTFC, Deutsche Bank’s swap data reporting system experienced an outage that prevented it from reporting any swaps data for five days.

The CTFC added that the bank’s attempts to resolve the issue “repeatedly exacerbated existing reporting problems and often led to the discovery or creation of new reporting problems”.

The civil complaint highlighted multiple data errors with the legal entity identifiers submitted by the bank for its swaps transactions and suggested that Deutsche Bank has an ongoing problem that is “affecting market data that is made available to the public, as well as data that is used by the CFTC to evaluate systemic risk throughout the swaps markets”.

Swaps dealers are required to report multiple data fields relating to their business including submitting real time swaps transaction and pricing data, swaps creation data and swaps continuation data, all of which is made available to the public.

Aitan Goelman, director of enforcement at the CFTC, said: “Deutsche Bank’s repeated violations warrant the intervention of a court-appointed monitor. Deutsche Bank has shown over the last year its inability to comply with its swap reporting responsibilities under the Commodity Exchange Act and CFTC regulations.”

“The CFTC treats these failures seriously and will take appropriate steps to ensure compliance.”

In addition to the CFTC’s civil complaint, the commission and Deutsche Bank have filed a joint motion seeking the appointment of a monitor to ensure Deutsche Bank’s compliance with its reporting responsibilities under the Commodity Exchange Act and CFTC regulations. CFTC stated it recognised Deutsche Bank's cooperation on this matter.

Deutsche Bank spokesperson commented: “We understand the concerns raised by the CFTC and have agreed on steps to resolve this matter. We continue to work on enhancing our reporting systems, and we are committed to meeting all regulatory requirements.”

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