According to Financial Conduct Authority, Merrill Lynch incorrectly reported 35 million transactions and failed to report another 121,387 transactions between November 2007 and November 2014.
The fine, which follows the issuing of a private warning by the watchdog in 2002 as well as a £150,000 fine in 2006, is a reflection of the division’s misconduct as well as the international arm’s failure to adequately address the root causes over several years despite receiving substantial guidance from the FCA.
Instead of the £1.00 per line used in the three recent transaction reporting cases, the FCA has used a penalty of £1.50 per line of incorrect or non-reported data for the first time as past fines have not been high enough to achieve reliable deterrence.
FCA enforcement and market oversight acting director Georgina Philippou said: "Proper transaction reporting really matters.
"Accurate and timely reporting of transactions is crucial for us to perform effective surveillance for insider trading and market manipulation in support of our objective to ensure that markets work well and with integrity."
Merrill Lynch received a 30% reduction in its overall fine as it agreed to settle at an early stage of the investigation.
The FCA has fined 11 other companies including Deutsche Bank, Barclays, Credit Suisse, Instinet, Getco, Commerzbank, Société Générale, City Index, James Sharp & Co, Plus500UK and RBS for transaction reporting breaches, till date.
Image: The Bank of America Tower in New York City. Photo: courtesy of User Jleon
