Press release 28 February 2023
Administrative fine imposed on Bank of Åland Plc for failures in reporting on derivatives contracts
The Financial Supervisory Authority (FIN-FSA) has imposed an administrative fine of EUR 60,000 to Bank of Åland Plc. In 2016–2021, the bank has neglected its obligation to ensure that details of all derivatives contracts it concludes are reported in accordance with regulation to a trade repository.
The obligation to report derivatives contracts to a trade repository is based on the EU Regulation on OTC derivatives, central counterparties and trade repositories (European Market Infrastructure Regulation, EMIR). The objective of the Regulation is to increase transparency and reduce risks in the derivatives markets. Therefore, the Regulation requires that counterparties report the details of all derivatives contracts they conclude to trade repositories, where the information is accessible on a centralised basis and more readily to the FIN-FSA and other authorities.
In February 2021, the FIN-FSA detected that the number and total nominal value of derivatives contracts reported for Bank of Åland Plc to trade repositories were suspiciously low in comparison to the extent of the bank's business. According to explanations received from the bank, it had been under the impression that the clearing broker used by it since 2016 had reported derivatives contracts to a trade repository appropriately on the bank's behalf. However, not all of the bank's derivatives contracts had been reported to a trade repository. The bank was responsible for ensuring that the information is reported in accordance with regulation.
In accordance with the Act on the Financial Supervisory Authority, the amount of an administrative fine payment is based on an overall assessment. In assessing the amount of the fine, consideration has been given to the nature, extent and duration of the malpractice. The administrative fine payment is payable to the State.
The decision on the imposition of an administrative fine is not yet legally binding. The bank may appeal the decision to the Helsinki Administrative Court within 30 days of receipt of notice of the decision. Information on the legal validity of the decision is available on the FIN-FSA website.
For further information, please contact
Janne Häyrynen, Head of Legal. Requests for interviews are coordinated by FIN-FSA Communications, tel. +358 9 183 5030 (weekdays 9:00–16:00).
FIN-FSA decision (pdf, Swedish)