Infinox Faces First MiFiR Transaction Reporting Fine: What You Need to Know

Infinox Faces First MiFiR Transaction Reporting Fine: What You Need to Know

Infinox Capital recently faced a significant penalty of £99,200 due to serious lapses in transaction reporting that posed risks for market abuse. This incident highlights the importance of compliance with regulatory standards in the financial sector, particularly regarding transaction reports for contracts for difference (CFDs).

FCA’s Findings on Infinox Capital

The Financial Conduct Authority (FCA) conducted a thorough investigation and discovered that between 1 October 2022 and 31 March 2023, Infinox Capital failed to submit a staggering 46,053 transaction reports. These reports were essential for monitoring single-stock CFDs that were executed through one of their corporate brokerage accounts.

Impact of the Breach

  • This corporate brokerage account represented the majority of Infinox’s CFD trades.
  • Despite identifying the reporting failure after a third-party review, Infinox did not proactively inform the FCA.
  • The FCA independently uncovered discrepancies in the transaction data submitted by Infinox.

Regulatory Implications

The FCA’s investigation revealed significant weaknesses in Infinox’s transaction reporting systems and controls, particularly for high-risk investment products. This fine marks a pivotal moment, as it is the first enforcement action against a firm for breaching transaction reporting requirements since the implementation of the UK Markets in Financial Instruments Regulation (MiFIR).

Statements from the FCA

Steve Smart, the joint executive director of enforcement and market oversight at the FCA, emphasized the importance of accurate and timely transaction submissions. He stated: “As a data-led regulator, it is vital that firms submit accurate and timely transaction reports, and promptly bring any failures to our attention. Infinox failed to do this, which meant market abuse could have flown under the radar and risked the integrity of the market.”

Conclusion

This incident serves as a warning to all firms in the financial industry about the consequences of inadequate compliance measures. The FCA continues to monitor market data in real-time to identify any signs of misconduct, reinforcing the need for firms to uphold stringent reporting standards.

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