The Commodity Futures Trading Commission (CFTC) has issued a $500,000 fine to UBS for alleged violations of audio recording regulations.
CFTC claims UBS failed to keep certain audio recordings for the time required under CFTC regulations. As a result, it claims the firm deleted over 1,000 hours of audio data after one day, this included voice recording files that were required by CFTC regulations to be retained for one year.
The order claims that prior to June 2019, UBS implemented multiple software systems to meet its recordkeeping obligations. Its tools would operate its trader turret communication devices, record calls on trader turrets and store the recorded files.
It claims the recording system had a known failure, which occasionally meant the multiple systems failed to synchronize certain call data, including the UBS trader’s identity, which would not transfer with corresponding voice recordings, it said.
This meant some recorded files were not assigned to a trader and were categorised as Trader 0 recordings and transferred to a storage system where they were retained for five years.
CFTC claims that following July 8 2019, UBS started prematurely deleting voice recording files after just one day. These files included recordings of pre-execution swaps trade information, which needs to be stored for a year.
The regulator states this was a result of a technology analyst believing the voice recordings were test files that did not need to be kept and redesignated those trader 0 files to have a one-day retention period.
In December 2019, UBS “inadvertently learned” of the error when trying to locate voice recording files. When it realised the files were incorrectly deleted it conducted an internal review to understand the extent of the issue, which amounted to 1,000 hours, or roughly 2.76 percent of total US recorded volume being deleted.
UBS then self-reported itself to CFTC for potential violation of regulations.
Last month, CFTC issued a $1m fine on Citibank and Citigroup Global Markets for failing to comply with certain swap dealer requirements.
Copyright © 2021 FinTech Global
Copyright © 2018 RegTech Analyst