Three affiliated swap dealers ("SDs") settled CFTC charges for improper reporting of swap valuations.
The CFTC had alleged that the SDs, when reporting certain equity swaps, reported the mark-to-market notional value of the underlying equity rather than the "daily mark," as required under CFTC Rule 45.4(d)(2). According to the Order, the error was caused by a "single issue in the reporting engine used by [the SDs]."
The CFTC determined that the SDs violated Section 2(a)(13)(F) ("Timeliness of reporting") of the CEA and CFTC Rule 45.4(d)(2) ("Swap data reporting: Continuation data"). Without admitting or denying the findings or conclusions in the order, the SDs agreed to (i) cease and desist from future violations, (ii) a $1.5 million civil monetary penalty to be paid jointly and severally and (iii) an undertaking to comply with certain conditions as set forth in the Order.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.