Merrill slapped with record fine for repeated transaction reporting failures

The Financial Conduct Authority has fined Merrill Lynch a record £13.3 million for repeated breaches of transaction reporting rules.

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Merrill slapped with record fine for repeated transaction reporting failures

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The watchdog says the size of the fine "reflects the severity of MLI’s misconduct, failure to adequately address the root causes over several years despite substantial FCA guidance to the industry and a poor history of transaction reporting compliance".

Merrill was previously warned of inadequacies in its back office back in 2002 and fined £150,000 for breaches of the rules in 2006.

The current charges address over 35 million transactions processed by the firm and a failure to report another 121,387 transactions between November 2007 and November 2014.

The FCA has used a penalty of £1.50 per line of incorrect or non-reported data for the first time rather than the £1.00 per line used in the three most recent transaction reporting cases "because past fines have not been high enough to achieve credible deterrence".

To date, the FCA has fined 11 other firms for transaction reporting breaches.

Georgina Philippou, FCA acting director of enforcement and market oversight, says: "Proper transaction reporting really matters. Merrill Lynch International has failed to get this right again - despite a Private Warning, a previous fine, and extensive FCA guidance and enforcement action in this area. The size of the fine sends a clear message that we expect to be heard and understood across the industry.

Merrill agreed to settle at an early stage of the investigation, and received a 30% reduction in it overall fine. Without this discount the fine would have risen to £19 million.

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