A tier-one bank has been fined a total of $348 million by US regulators due to shortcomings in its trade surveillance program.
The Office of the Comptroller of the Currency (OCC) imposed a fine of $250 million, while the Federal Reserve imposed a penalty of $98 million.
While there has been a significant focus on off-channel communications over the last number of years, it seems regulatory bodies are now also focusing on trade surveillance failures.
The fines in this instance were served because of failures in the bank's surveillance program to monitor specific employee and client behavior.
The deficiencies in the firm's trade surveillance program have been present since at least 2019. These include inadequate governance over trading venues and insufficient data controls.
The bank is now required to undertake various remedial measures, including seeking approval from the OCC before adding new trading venues and commissioning an independent third party to conduct a trade surveillance program assessment.
A spokesperson for the OCC said, “The consequences of these deficiencies include the bank’s failure to surveil billions of instances of trading activity on at least 30 global trading venues.”
This development underscores the importance of robust surveillance to maintain market integrity. It also highlights the ongoing efforts of regulators to enforce compliance and mitigate risks within the financial system.
How SteelEye can help with Trade Surveillance challenges
For financial institutions seeking to enhance their surveillance capabilities and avoid the pitfalls encountered by this tier-one firm, it is imperative to explore solutions that will ensure they are meeting their regulatory obligations.
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