Washington, D.C. – On October 1, 2019, the Commodity Futures Trading Commission (CFTC) announced charges and a settlement with HSBC Bank USA, N.A. for deficiencies in its risk management systems and swap data reporting practices. The bank, a provisionally registered swap dealer, was penalized $650,000 for the violations.
The CFTC order details that between January 2013 and November 2015, HSBC failed to establish a designated governing body or assign senior management to oversee its swap dealing activities as required by CFTC regulations. This lack of oversight led to improper reporting of swap data to swap data repositories in certain categories and for specific transactions.
According to the CFTC, HSBC did not adequately implement the necessary risk management protocols for its swap business. The order acknowledges that the $650,000 civil monetary penalty was reduced due to HSBC’s cooperation with the investigation and its subsequent remediation efforts.
The investigation was led by CFTC staff members Michael Geiser, Peter Janowski, Candice Aloisi, Lenel Hickson, Jr., and Manal M. Sultan from the Division of Enforcement, with assistance from Pamela M. Geraghty and Meghan Tente of the Divisions of Swap Dealer and Intermediary Oversight and Market Oversight, respectively.
The case highlights the CFTC’s ongoing commitment to ensuring swap dealers adhere to risk management and reporting requirements, safeguarding the integrity of the derivatives market.
Source: CFTC.gov
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