Europe’s financial markets watchdog has fined trade repository REGIS-TR, S.A. €1,374,000 for seven breaches of EU rules on derivatives and securities financing transactions.
Trade repositories are firms that collect and store reports on financial trades so regulators can monitor risks in markets, the European Securities and Markets Authority (ESMA) said in a statement on Thursday.
The infringements were found under the European Market Infrastructure Regulation (EMIR), which covers derivatives reporting, and the Securities Financing Transactions Regulation (SFTR), which covers transactions such as repurchase agreements and securities lending.
This is ESMA’s first enforcement case involving SFTR breaches and the largest fine it has imposed on a trade repository so far, the organisation said.
It also issued a public notice and ordered REGIS-TR to end ongoing infringements.
ESMA noted it found long-running problems that affected REGIS-TR’s services under both EMIR and SFTR, including issues that undermined the implementation of SFTR reporting and compromised the confidentiality of trade repository data.
What ESMA said REGIS-TR did wrong
REGIS-TR failed to comply with obligations under EMIR and SFTR, including organisational requirements and protections around confidential information, ESMA Chair Verena Ross said.
The seven breaches included deficiencies in policies and procedures that led to unclear roles and responsibilities for governing bodies, as well as shortcomings in organisational structure that did not ensure continuity and orderly functioning for SFTR-related services.
ESMA also found failures to identify and minimise operational risks through appropriate systems and controls, and failures to ensure confidentiality and prevent misuse of information received under EMIR.
The breaches resulted from negligence, and ESMA said it considered aggravating and mitigating factors set out in EMIR when calculating the fine.
REGIS-TR has also been ordered to fix three infringements that had not yet been remedied, covering policies and procedures under EMIR and SFTR and business continuity arrangements under SFTR.
