Deutsche Bank Faces CFTC Sanctions Over Swap-Data Report Lapses

  • Regulators says April systems outage uncovered other problems
  • Company agrees to have monitor appointed to ensure compliance

Deutsche Bank AG is facing sanctions after the U.S. Commodity Futures Trading Commission said the company violated multiple swap data reporting rules because of a system outage and had inadequate business continuity and disaster recovery plans.

On April 16, Deutsche Bank experienced a system failure that kept it from reporting swaps data for multiple asset classes for five days, the CFTC said in a statement Thursday. Efforts to correct the outage led to the discovery or creation of other problems that violated a previous order, the regulator said.

Deutsche Bank and the CFTC agreed to the appointment of a monitor to ensure the bank meets its reporting responsibilities. The regulator also wants to impose a fine and a permanent injunction on the Frankfurt-based company.

“Deutsche Bank’s repeated violations warrant the intervention of a court-appointed monitor,” CFTC Enforcement Director Aitan Goelman said in a statement. “Deutsche Bank has shown over the last year its inability to comply with its swap reporting responsibilities under the Commodity Exchange Act and CFTC Regulations.”

U.S. authorities have been cracking down on swaps reporting following Dodd-Frank Act requirements that call for real-time reporting of transactions. The new complaint comes less than a year after the CFTC ordered Deutsche Bank to pay $2.5 million over claims that it failed to properly report swaps deals. Regulators said Thursday that some of the firm’s reporting problems affect market data and regulators’ ability to evaluate systemic risk.

“We understand the concerns raised by the CFTC and have agreed on steps to resolve this matter,” Deutsche Bank said in a statement. “We continue to work on enhancing our reporting systems, and we are committed to meeting all regulatory requirements.”

The CFTC on Thursday acknowledged Deutsche Bank’s cooperation in the case.

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