(Bloomberg) -- Goldman Sachs Group Inc. is facing a probe from U.K. regulators over its reporting practices tied to new rules in European markets, according to people with knowledge of the matter.
The Financial Conduct Authority has been investigating the matter this year, the people said, asking not to be identified as the inquiry is ongoing. Earlier this year, a former Goldman Sachs employee sent a complaint to the FCA alleging that the bank’s approach was to flood regulators with too much data and inaccurate information in breach of compliance guidelines, the people said.
A spokesman for Goldman Sachs declined to comment. A representative for the FCA declined to comment.
Europe’s revision of the Markets in Financial Instruments Directive came into force earlier this year and requires money managers to split research costs from brokerage services so that customers get a better deal. The regulations also require enhanced reporting from finance firms about their trading activities. That is primarily aimed at providing more protection for investors in addition to leading to increased transparency on major trading activity.
The FCA has said that it doesn’t plan to take any action against firms that have taken sufficient steps to meet their obligations in time, because of how big and complicated the changes are. However, it’s able to use fines and other measures to penalize banks should their non-compliance be intentional.
The FCA has received more than 500 million transaction reports a month since MiFID II came into effect on Jan. 3, an increase of more than 55 percent from a year earlier.
Goldman Sachs generates about a quarter of its revenue from the Europe, Middle East and Africa region, and has more than 5,000 employees in the U.K.
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