The Commodity Futures Trading Commission (CFTC) recently issued an order simultaneously filing charges and reaching settlements against swap dealers and futures commission merchant (FCM) affiliates of four financial institutions for failing to maintain, maintain or generate records kept under CFTC record-keeping requirements and for failing to carefully monitor matters related to their business as CFTC registrants。

The settlement registrar acknowledges the facts detailed in the order, orders it to cease and desist from further violations of record-keeping and supervision requirements, and orders it to take specified remedial measures。

The Clearing Bank Subsidiary Swap Dealer and / or FCM are:

• BNP Paribas S.A.and BNP Paribas Securities Corp.) $75 million
  Société Générale SA and SG Americas Securities, LLC $75 million
  Wells Fargo Bank NA and Wells Fargo Securities LLC $75 million
  Bank of Montreal - $35 million

For each order type, the relevant swap dealer and / or FCM failed for several years to prevent its employees (including senior employees) from using unapproved means of communication (including messages sent via personal SMS or WhatsApp) for internal and external communication。

These companies are required to retain certain written communications as they relate to the business of these companies as CFTC registrants。These written communications are not typically maintained and preserved by the Company, and the Company is generally unable to provide them immediately upon request by the CFTC。

It was further found that the widespread use of unapproved communication methods violated the internal policies and procedures of the swap dealer and / or FCM, which generally prohibit business-related communication through unapproved methods。In addition, some regulators responsible for ensuring compliance with company policies and procedures have themselves used unapproved means of communication for business-related communications in violation of company policy.。

The order found that each registrant failed to maintain hundreds, if not thousands, of business-related communications, including communications related to its merchandise and swap businesses, and therefore failed to carefully regulate its business as a CFTC registrant, in violation of CFTC record-keeping and regulation, as each registrant failed to ensure that its employees (including top-level employees) followed communication policies and procedures.。

Since December 2021, the CFTC has imposed 10 penalties on 18 financial institutions..$9.1 billion in civil fines for using unapproved means of communication in violation of CFTC recordkeeping and regulatory requirements。