September 14, 2018
CFTC Settles Swap Reporting Charges with Natwest Markets Plc
Washington, DC – The Commodity Futures Trading Commission (CFTC) today issued an Order filing and simultaneously settling charges against NatWest Markets Plc (NatWest), formerly The Royal Bank of Scotland plc (RBS), a provisionally registered swap dealer, for failing to comply with its swap transaction reporting obligations as a swap dealer. According to the Order, NatWest failed to report on a timely basis and misreported hundreds of thousands of transactions to a swap dealer repository (SDR). The CFTC Order imposes a $750,000 civil monetary penalty on NatWest, among other sanctions, for these reporting violations.
CFTC’s Director of Enforcement Comments
James McDonald, CFTC Director of Enforcement, stated: “The accuracy and completeness of swap reporting are critical to the CFTC’s mission to protect market participants and to ensure market integrity. These reporting requirements are designed to enhance transparency, promote standardization, and reduce systemic risk. As this action shows, the CFTC will continue to vigorously enforce these reporting requirements.”
The Order specifically finds that NatWest had multiple swaps reporting errors across more than 50 discrete areas. At least several hundred thousand swaps in rates, credit, equities, and foreign exchange asset classes were affected by the identified deficiencies in its swaps reporting practices, which resulted in reporting errors. These swaps reporting errors centered primarily on NatWest’s inability to timely and properly report to an SDR swaps creation data, swaps continuation data, unique swap identifiers, pre-enactment swap transactions, and corrected swaps data. Moreover, NatWest failed to report in a timely manner to an SDR the required primary economic terms and continuation data for hundreds of thousands of pre-enactment swap transactions in the rates and credit asset classes that were in existence on or after April 25, 2011. These reporting failures were in violation of the reporting requirements of Parts 43, 45 and 46 of the CFTC Regulations.
The Order recognizes that NatWest substantially cooperated with the Enforcement Division’s investigation by providing quarterly updates, undertaking an internal investigation, and taking remedial action to correct its reporting failures.
CFTC Division of Enforcement staff members responsible for this case are James Deacon, Alison B. Wilson, and Rick Glaser. The Division of Market Oversight staff members responsible for this matter are Owen Kopon, David Aron, and Daniel J. Bucsa.