November 30, 2021 Decisions and Freeze and cease trade orders Securities

Montréal – The Financial Markets Administrative Tribunal (the “FMAT”) rendered a decision approving a settlement agreement between the Autorité des marchés financiers (the “AMF”) on the one hand and Bloomberg Trading Facility Limited (“BTFL”), Bloomberg Trading Facility B.V. (“BV”) and Bloomberg SEF LLC (“BSEF”) on the other, thereby giving effect to an administrative monetary penalty in the amount of $4,000,000 against BTFL, BV and BSEF.

The agreement followed a review conducted by the AMF that revealed that BTFL and BV, two foreign corporations operating multilateral trading facilities (“MTF”) for various financial products, including fixed income securities and swaps, had carried on business as an exchange in Québec without being recognized as an exchange by the AMF. The review also revealed that BTFL and BV had filed applications for exemptions from recognition as an exchange with the AMF that contained inaccurate and incomplete information. BTFL and BV had also provided incomplete and inaccurate information regarding the scope of fixed income securities and derivatives trading conducted by Québec participants on their MTFs.

The same review revealed that BSEF, a foreign corporation operating a swap execution facility (“SEF”), had filed quarterly reports that did not accurately and completely disclose derivatives trading on its SEF and thereby failed to comply with the conditions set out in the October 2, 2013 and October 23, 2017 decisions by the AMF granting it an exemption from recognition as an exchange.

As part of the agreement, BFTL, BSEF and BV admitted to all the relevant facts and breaches of Québec securities and derivatives law. In particular, they acknowledged that an exchange carries on activities in Québec if it provides Québec participants with direct access to the exchange. This includes a participant with its headquarters address or a legal address in Québec and all traders conducting transactions on its behalf, regardless of the traders’ physical location (inclusive of non-Québec branches of Québec legal entities), as well as any trader physically located in Québec who conducts transactions on behalf of any other entity.

In its decision, the FMAT points out that “[translation] a domestic or foreign exchange’s compliance with the requirement (i) to obtain authorization from the AMF in order to carry on activities in Québec and (ii) to comply with the conditions imposed by such authorization is central to protecting Québec investors and maintaining the integrity of Québec as a financial centre.”
The administrative monetary penalty to be jointly paid by BTFL, BV and BSEF reflects the cooperation shown and efforts made by BTFL, BV and BSEF in rectifying the compliance and supervisory shortcomings that led to the breaches of Québec securities and derivatives law.

The AMF recommends to anyone currently carrying on business as an exchange in Québec without being recognized as an exchange or without having been exempted from recognition as an exchange that they contact the AMF without delay.

The Autorité des marchés financiers is the regulatory and oversight body for Québec’s financial sector.

– 30 –

Information:

Media only:
Sylvain Théberge: 514-940-2176

Information Centre:
Québec City: 418-525-0337
Montréal: 514-95-0337
Toll-free: 1-877-525-0337
Twitter: @lautorite This link will open in a new window
LinkedIn: Autorité des marchés financiers (Québec) This link will open in a new window