Washington, D.C. – Société Générale International, a provisionally registered swap dealer, has been slapped with a $2.5 million penalty by the Commodity Futures Trading Commission (CFTC) for widespread and systemic failures in its swap data reporting obligations. The CFTC announced the settlement on Monday, September 30, 2019, detailing violations of the Commodity Exchange Act (CEA) and related CFTC regulations.
According to the CFTC order, Société Générale International failed to adequately comply with requirements to report swap data across all asset classes. The firm also lacked sufficient policies and procedures to determine the U.S. person status of its swap counterparties – a critical component of regulatory compliance. Furthermore, the CFTC found the company’s supervisory systems were ineffective in overseeing related business activities.
The penalty, while substantial, was significantly reduced due to Société Générale International’s proactive self-reporting of the violations to the CFTC. Investigators also noted the firm’s full cooperation with the Division of Enforcement’s investigation and its extensive remediation efforts. These included a thorough analysis of historical errors, the implementation of a new data reporting architecture, and the backreporting of corrected data to a swap data repository.
As part of the settlement, Société Générale International is required to continue its remediation efforts and provide updates to the CFTC regarding its progress and ongoing compliance. The CFTC specifically acknowledged the assistance provided by the National Futures Association in the investigation.
The investigation involved staff from the CFTC’s Division of Market Oversight and Division of Swap Dealer and Intermediary Oversight, alongside the Division of Enforcement. Alejandra de Urioste of the Division of Enforcement led the case, supported by Chris Giglio, Patryk J. Chudy, Lenel Hickson Jr., and Manal M. Sultan.
Source: CFTC.gov
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