CFTC Orders Societe Generale to Pay $1.5 Million for Supervision Failures
- The French financial services provider allegedly committed such violations between 2013 and July 2021.
The US Commodity Futures Trading Commission (CFTC) announced on Wednesday that it filed and settled charges against Societe Generale, a leading financial services provider based in France, for swap valuation data and supervision failures.
According to the press release, the French banking services provider failed to comply with certain swap dealer requirements for disclosing mid-market marks to counterparties and reported inaccurate swap valuation data to a Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term data repository. The order stated that between 2013 and July 2021, Societe Generale committed such violations to the CFTC regulations, as it adjusted such daily marks for profit, hedging or other legally impermissible costs or adjustments.
“The order also finds that Société Générale failed to report certain swap valuation data to an SDR accurately. Société Générale also failed to maintain an adequate supervisory system and failed to perform its supervisory Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you Read this Term diligently with respect to mid-market mark disclosures,” the CFTC noted.
That said, the authority imposed a $1,500,000 civil monetary penalty and issued a cease and desist order while asking Societe Generale to meet the compliance requirements on time. “This is another in a series of cases the CFTC has brought highlighting the need for swap dealer registrants to have an adequate supervisory system and controls in place. Swap dealer registrants must ensure that they make complete and accurate disclosures to counterparties and accurately report swap valuation data to SDRs, and must also diligently perform their supervisory duties,” Vincent McGonagle, CFTC’s Acting Director of Enforcement, commented on the matter.
Recent Swap Dealer Non-compliance Cases
For a similar situation, the CFTC recently filed and settled charges against Citibank and Citigroup Global Markets Limited for failing to comply with certain swap dealer requirements. The watchdog argued that Citi did not allegedly report the Legal Entity Identifier (LEI) data to a swap repository known as SDR, among other supervision failures.
The US Commodity Futures Trading Commission (CFTC) announced on Wednesday that it filed and settled charges against Societe Generale, a leading financial services provider based in France, for swap valuation data and supervision failures.
According to the press release, the French banking services provider failed to comply with certain swap dealer requirements for disclosing mid-market marks to counterparties and reported inaccurate swap valuation data to a Swaps Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Swaps can be defined as a derivate contact composed of two parties that exchange to cash flow between two separate financial instruments.They are generally divided into two categories. This includes contingent claims (options) and forward claims, where forward contracts, swaps, and exchange-traded funds (ETFs) are exchanged. Commodity price, equity price, interest rate, and foreign exchange rate are common variables used as one of the cash flows in swaps upon initiation. Different Types of Swaps Read this Term data repository. The order stated that between 2013 and July 2021, Societe Generale committed such violations to the CFTC regulations, as it adjusted such daily marks for profit, hedging or other legally impermissible costs or adjustments.
“The order also finds that Société Générale failed to report certain swap valuation data to an SDR accurately. Société Générale also failed to maintain an adequate supervisory system and failed to perform its supervisory Obligations Obligations In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you In finance, an obligation is a financial responsibility where the terms of a contract must be met. Should an obligation between parties fail then the party who is at default may face legal action. In this scenario, the guilty party will not only have to agree to pay the set amount to fulfill the contractual arrangement but may also be responsible for covering all legal proceedings cost. Routine payments or outstanding debt of any kind are considered financial obligations, so if someone owes you Read this Term diligently with respect to mid-market mark disclosures,” the CFTC noted.
That said, the authority imposed a $1,500,000 civil monetary penalty and issued a cease and desist order while asking Societe Generale to meet the compliance requirements on time. “This is another in a series of cases the CFTC has brought highlighting the need for swap dealer registrants to have an adequate supervisory system and controls in place. Swap dealer registrants must ensure that they make complete and accurate disclosures to counterparties and accurately report swap valuation data to SDRs, and must also diligently perform their supervisory duties,” Vincent McGonagle, CFTC’s Acting Director of Enforcement, commented on the matter.
Recent Swap Dealer Non-compliance Cases
For a similar situation, the CFTC recently filed and settled charges against Citibank and Citigroup Global Markets Limited for failing to comply with certain swap dealer requirements. The watchdog argued that Citi did not allegedly report the Legal Entity Identifier (LEI) data to a swap repository known as SDR, among other supervision failures.