Two subsidiaries of Bloomberg L.P. agreed to pay more than $3 million to resolve Ontario watchdog’s allegations that they operated in Canada without proper authorization and allowed Ontarians to trade on their unregistered trading facilities.
Additionally, the Ontario Securities Commission accused Bloomberg Trading Facility Limited (BTFL) and Bloomberg Trading Facility B.V. (BV) of failure to provide accurate and complete information to regulators.
A three-member panel of OSC commissioners on Friday approved the settlement agreement with the two firms, which operate multilateral trading facilities for fixed income securities and swaps. In addition to paying an administrative penalty of CAD $2.5 million, the Bloomberg units disgorged $663,000 in fees earned from Ontario-based investors.
“These are two sophisticated corporations, conducting business on a global scale, that failed to comply with Ontario securities laws. These entities must be vigilant in monitoring compliance of their activities with securities laws and have an obligation to report accurately to regulators. This expectation applies to every entity carrying on business in Ontario,” said Jeff Kehoe, Director of the Enforcement Branch at the OSC.
Kohle Capital Strengthening Retail OfferingGo to article >>
BTFL and BV Traded before Obtaining Exemptions
In a 13-page statement of allegations, the OSC said both BTFL and BV, neither of which has a physical presence in Ontario, failed to obtain permission or exemption to operate their platforms in the province.
The FCA-regulated Bloomberg Trading Facility Ltd. applied to the provincial regulator in 2017 to be exempted, as required by law. But, in fact, this happened after it had already onboarded and engaged Ontario participants in fixed income transactions.
Those intuitional investors traded more than $230 billion worth of securities on its multilateral trading facility, including $57 billion before an exemption was granted.
As for Bloomberg Trading Facility B.V. (BV), the securities regulator said it had applied seeking exemptions from the requirement to be recognized as an exchange. The Netherlands-based Bloomberg platform was not granted registration, or an interim exemption, to date. However, the OSC claims that BV already provided 18 Ontario participants access to trade in fixed-income securities access over a 15-month period.