The Luxembourg Financial Sector Supervisory Commission (CSSF) said Edmond de Rothschild ran afoul of EU rules on derivatives contracts. It “[failed] to comply with the requirements related to the reporting obligation of the details of any derivative contract concluded and of any modification or termination of the contract to a registered or authorised trade repository” and “[provided] incorrect information to the CSSF”.

The CSSF levied the fine earlier this year and announced the sanction on 16 September. The regulator said:

“In determining the amount of the administrative fine, the CSSF has taken into consideration the cooperation of the Manager and the remedial actions undertaken by the Manager in order to address the deficiencies identified.”

In a statement to Delano, Edmond de Rothschild said the faulty reporting was handled by a service provider and that it had taken steps to improve its compliance processes. The financial firm stated:

“Edmond de Rothschild Asset Management (Luxembourg) has acknowledged the administrative fine notified by the CSSF on 17 January 2020 with regards to certain deficiencies observed in the supervision of EMIR data reporting obligations to trade repositories on OTC derivatives. This relates to a UCITS fund for which Edmond de Rothschild Asset Management (Luxembourg) has delegated the management to a third-party. As compliance is a priority of the Group, a remedial action has been implemented in 2019 in order to strengthen the oversight performed by Edmond de Rothschild Asset Management (Luxembourg) on delegated investment managers and to ensure compliance with the reporting obligations applicable in the framework of EMIR. The administrative fine imposed by the CSSF amounts to €20,000.”

Emir refers to the European market infrastructure regulation, which “lays down rules on OTC derivatives, central counterparties and trade repositories.” Ucits are the type of retail investment funds that make up the majority of Luxembourg’s asset management sector.