Bloomberg companies to pay $4 million for securities violations after FMAT approves settlement deal

The settlement deal stemmed from a review conducted on Bloomberg companies' activities

Bloomberg companies to pay $4 million for securities violations after FMAT approves settlement deal

The Financial Markets Administrative Tribunal (FMAT) has approved a settlement deal in which foreign companies owned by Bloomberg have agreed to pay $4 million to the Autorité des marchés financiers (AMF) for violations of Quebec securities and derivatives law.

The $4-million penalty agreed to be paid by Bloomberg companies reflects their cooperation and efforts “in rectifying the compliance and supervisory shortcomings that led to the violations of  Quebec securities and derivatives law”, said a news release from the AMF, Quebec's financial regulatory and oversight agency.

The deal stemmed from a review conducted by the AMF on activities of three Bloomberg companies − Bloomberg Trading Facility Ltd. (BTFL), Bloomberg Trading Facility B.V. (BV), and Bloomberg SEF LLC (BSEF).

The AMF found that BTFL and BV have been carrying on business in Québec as an exchange without its approval. AMF also found that BTFL and BV provided inaccurate and incomplete information, first, in their applications for exemptions from recognition as an exchange and second, regarding the scope of fixed income securities and derivatives trading conducted by Québec participants on their multilateral trading facilities.

In addition, the AMF discovered that BSEF submitted inaccurate and incomplete quarterly reports relating to derivatives trading on its swap execution facility and therefore, failed to comply with the conditions set out in AMF’s October 2013 and 2017 decisions exempting it from being recognized as an exchange.

As part of the deal, BFTL, BV and BSEF admitted to all the violations they had committed under the securities and derivatives law, the AMF said in the release.

“In particular, they acknowledged that an exchange carries on activities in Québec, if it provides Québec participants with direct access to the exchange. This includes a participant with its headquarters address or a legal address in Québec and all traders conducting transactions on its behalf, regardless of the traders' physical location (inclusive of non-Quebec branches of Quebec legal entities), as well as any trader physically located in Quebec who conducts transactions on behalf of any other entity.”

In its translated decision, FMAT noted that getting an approval from the AMF to carry on activities in Québec and complying with the conditions on domestic or foreign exchange is vital in “protecting Québec investors and maintaining the integrity of Québec as a financial centre.”

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