Article 9(1) of the European Markets Infrastructure Regulation (EMIR) requires details of any derivative contracts to be reported to a registered trade repository no later than the working day following the conclusion of the contract.

The ICAV has admitted that it failed to report 200,640 derivative trades entered into between January 2018 and May 2020 by one of its sub-funds to a trade repository.

The Central Bank determined the appropriate fine to be €275,000, which was reduced by 30 per cent to €192,500 as allowed for by the settlement discount scheme. This is the first monetary penalty imposed on an investment fund by the Central Bank to date.

Seána Cunningham, the Central Bank’s director of enforcement and anti-money laundering, said: “This case highlights the importance of timely and accurate data reporting.

“The reporting obligations under EMIR and other sectoral legislation increase transparency and enable the Central Bank to obtain a complete picture of each firm’s operations, to fully understand the risks facing firms operating in securities markets, and thereby to address systemic risk. Incomplete or inaccurate data actively hinders market monitoring processes and activities.

“Firms must have appropriate oversight of data reporting from board level down, including where data reporting is delegated or outsourced. The delegation of reporting obligations must be appropriately managed in order to avoid confusion between the delegates as to their respective reporting responsibilities.

“We have reiterated the importance of data quality and of EMIR reporting to industry over a number of years and in each securities markets risk outlook report we have published since 2021. The gap in data reporting which gave rise to this investigation only became apparent to the ICAV upon a review of its EMIR reporting arrangements, prompted by the Central Bank’s letter to industry in 2019 on this theme.

“We also expect firms to bring material failures to our attention at the earliest opportunity and to act expediently to address identified issues.

“This investigation found that, despite the ICAV identifying in May 2020 that thousands of its derivative trades had not been reported to a trade repository in breach of its EMIR reporting obligation, the ICAV only notified the Central Bank of this failure following engagement initiated by the Central Bank.

“Compliance by the industry with data reporting obligations will continue to be an area of focus for the Central Bank.”