Press release 25 August 2022
Administrative fine imposed on S-Bank Plc for failures in reporting on derivatives contracts
The FIN-FSA has imposed an administrative fine of EUR 60,000 to S-Bank Plc. In the period from June 2019 to March 2021, the bank has neglected its obligation to ensure that details of all derivatives contracts it concludes are reported to a trade repository in accordance with regulation.
The obligation to report derivatives contracts to a trade repository is based on the EU Regulation on OTC derivatives, central counterparties and trade repositories (European Market Infrastructure Regulation, EMIR). The objective of the Regulation is to increase transparency and reduce risks in the derivatives markets. Therefore, the Regulation requires that counterparties report the details of all derivatives contracts they conclude to trade repositories, where the information is accessible on a centralised basis and more readily to the FIN-FSA and other authorities.
In spring 2021, the FIN-FSA detected that the number and total nominal value of derivatives contracts reported for S-Bank Plc to trade repositories were suspiciously low in comparison to the extent of the bank's business. According to an explanation received from the bank, the bank had mistakenly assumed that the clearing broker used by it since June 2019 would report derivatives contracts to a trade repository on the bank's behalf. Nevertheless, the bank was responsible for ensuring that the information is reported in accordance with regulation.
In accordance with the Act on the Financial Supervisory Authority, the amount of an administrative fine payment is based on an overall assessment. In assessing the amount of the fine, consideration has been given to the nature, extent and duration of the malpractice. The administrative fine payment is payable to the State.
The decision on the imposition of an administrative fine is not yet legally binding. The bank may appeal the decision to the Helsinki Administrative Court within 30 days receipt of notice of the decision. Information on the legal validity of the decision is available on the FIN-FSA website.
For further information, please contact
Teemu Kastula, Legal Advisor. Requests for interviews are coordinated by FIN-FSA Communications, tel. +358 50 385 5030 (weekdays 9:00–16:00).
Appendix
FIN-FSA decision (pdf, in Finnish)