European derivatives trade repository REGIS-TR, S.A., is being sanctioned for regulatory violations by the European Securities and Markets Authority (ESMA).
In its first enforcement action for breaching the Securities Financing Transactions Regulation (SFTR), the regulator imposed its highest-ever fine on a trade repository — a total of €1.37 million for seven violations of the SFTR and the European Market Infrastructure Regulation (EMIR).
Among other things, ESMA found that the firm “did not comply with key organizational obligations laid down in EMIR and SFTR relating to adequate policies and procedures, organizational structure, and operational risk, as well as specific requirements related to confidentiality and misuse of the information.”
ESMA said that it’s important for trade repositories to comply with their obligations under these rules “to ensure the quality of the [trade repository] data and protect the stability, integrity and trustworthiness of [European] financial markets.” It added that the shortcomings identified in this case “undermined the correct implementation of the new SFTR reporting regime and compromised the confidentiality of [trade repository] data.
Alongside the monetary penalty, ESMA also issued a public notice directing the Luxembourg-based firm to correct three ongoing deficiencies that were identified in the enforcement action.
“Data on trades made available to public authorities is essential for market surveillance, enabling early detection of exposure concentrations, cross-border risks, and changes in liquidity and leverage. Today’s decision highlights ESMA’s commitment to enforcing essential requirements that ensure transparency and contribute to well-functioning markets,” said Verena Ross, ESMA’s chair, in a release.
“This case stems from long-lasting serious overarching issues identified at REGIS-TR. We will continue to foster a strong compliance culture, including by taking enforcement action, when appropriate,” she added.