BNY Mellon to Pay $5 Million Settlement for Swap Reporting and Supervision Failures

In a recent statement, the U.S. Commodity Futures Trading Commission (CFTC) announced that The Bank of New York Mellon (BNY) has agreed to pay a settlement of $5 million. The penalty comes as a result of BNY's repeated failure to accurately report millions of swap transactions and its failure to effectively oversee its swap dealer business.

According to the CFTC, BNY Mellon failed to report at least 5 million swap transactions correctly and did not adequately supervise its swap dealer business from 2018 to 2023. These lapses in reporting and supervision were found to be in violation of a previous order issued by the CFTC against the bank in 2019. The regulator highlighted that certain failures directly contradicted the terms outlined in the previous order.

In addition to the financial penalty, BNY Mellon has chosen to retain an independent compliance consultant to conduct a thorough review of its compliance program. This decision reflects the bank's commitment to addressing and rectifying the shortcomings identified in its reporting and supervision processes.

A spokesperson for BNY Mellon expressed the bank's serious approach to regulatory responsibilities and their satisfaction in reaching a resolution. The bank acknowledges the importance of upholding compliance standards and aims to learn from this incident to prevent similar issues from arising in the future.

The settlement with the CFTC serves as a reminder to financial institutions of the criticality of accurate and timely reporting, as well as the need for robust supervision in the realm of swap transactions. Regulatory bodies continue to closely monitor such transactions to ensure transparency and safeguard the integrity of the financial markets.

The agreement reached between BNY Mellon and the CFTC sends a signal that non-compliance with regulatory requirements will be met with substantial penalties. As financial institutions evolve their operations in complex markets, the expectation remains high for them to prioritize and maintain strong oversight protocols in order to avoid potential violations and their associated consequences.