Qomply Launches CFTC Reporting & Reconciliation Solutions in the US

Qomply has expanded into the United States with a dedicated CFTC transaction reporting reconciliation and data quality suite - designed to help swap dealers and reporting firms meet Part 45 obligations as regulatory enforcement intensifies.

Qomply's entry into the US market coincides with recent enforcement activity by the US CFTC regulator. The fines handed down sent a clear message to firms dealing in Over-the-Counter derivatives to either prioritise accurate reports and identify open positions or face severe penalties.

“It now has been 13 years since Dodd-Frank and well past time for swap dealers to ensure they are in full compliance with the CEA and CFTC regulations,” said CFTC Division of Enforcement Director Ian McGinley. “As significant reporting failures continue to persist, our resolutions will reflect the gravity of swap dealers’ continuing failures to prioritize compliance and seek to deter future failures. “

McGinley's comments follow the September 2023 CFTC's imposement of fines totalling $50 Million across three major financial investment firms for failures related to the accuracy and timeliness of transaction reports required by CFTC regulations. Identifying Open Positions, correcting breaks, resolving data quality issues and reporting late were all noted as contributory factors to the punitive enforcement.

Headquartered in London, UK, Qomply has been helping clients comply with the complex transaction reporting rules since 2019. Managing Director at Qomply, Michelle Zak observes: “Qomply’s entry into the US is timely as CFTC transaction reporting faces increased scrutiny. Data quality is one part of accurate reports. Detecting Open Positions, identifying static data and reference data issues, misrepresenting product classifications and reporting incorrect price notations are amongst the violations noted by the CFTC. These are all areas that would have been easily detected by Qomply.”

“Many firms compute the cost of transaction reporting as an operational cost that can be broken down into a price per transaction. However, enforcement action can dwarf the everyday costs of producing reports. Regulators have the authority to force a firm to undertake an external audit that can incur fees upwards of $1 million when incorporating internal resources as well as external subject matter experts.”

The CFTC notes: “In FY 2023, the CFTC’s Division of Enforcement (DOE) filed 96 enforcement actions charging fraud, manipulation, and other significant violations in diverse markets, including digital assets and swaps markets, resulting in over $4.3 billion in penalties, restitution and disgorgement.”

Qomply has received success in the UK and is highly-regarded for the comprehensiveness of their transaction reporting services. Many clients have experienced significant results, including over an 80% reduction in costs and more than a 65% reduction in time spent on manual processes. Qomply is well-positioned to replicate this success in the US.