Firms that fail to disclose over-the-counter derivatives face fines from regulators, according to a draft law from the European Commission.
The bill, obtained by Bloomberg News, states that traders must report the details of any OTC derivative contract… no later than the working day following the execution of the trade.
Administrative fines will be the lowest penalty enforced. The penalties provided for shall be effective, proportionate and dissuasive, the bill stated.
European banks do not have a good track record on reporting trades. Since August 2009, the UK Financial Services Authority has issued six fines against firms failing to provide accurate transaction reports, including Barclays, Credit Suisse, Getcon Europe, Instinet Europe, Commerzbank AG. The regulator recently fined Socit Gnrale 1.575 million for failure to submit accurate reports for approximately 80% of its reportable transactions, across all of its asset classes, for a period of over two years.