Citigroup Settles Reporting Violations with Montreal Exchange

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Citigroup Inc.) has reached a settlement agreement with the Bourse de Montreal (MX) to resolve allegations of failing to properly report on options contracts, the exchange announced on Thursday.

According to the MX, Citigroup fell short of its regulatory obligations by not having a system in place to adequately supervise employees and ensure their compliance with reporting rules for options exceeding a certain threshold. These options contracts represent agreements to buy or sell a security at a specific price by a certain date.

The settlement includes a $138,000 fine for Citigroup, along with an additional $10,600 to cover related costs. This comes on the heels of a separate $136 million penalty levied by U.S. banking regulators last week. Those regulators cited Citigroup’s “insufficient progress” in addressing data management issues identified in 2020. They also mandated that the bank demonstrate a more substantial resource allocation towards fixing these problems.

Options contracts are a crucial component of the financial markets, allowing investors to hedge their positions or speculate on price movements. Accurate and timely reporting of these contracts is essential for ensuring market transparency and stability. By failing to properly supervise employees and maintain a compliant reporting system, Citigroup potentially compromised this transparency.

The Montreal Exchange, a major derivatives marketplace in Canada, takes such reporting violations seriously. Their action against Citigroup sends a clear message to other market participants about the importance of adhering to reporting regulations.

Citigroup has not yet issued a public statement regarding the settlement.