Spain's stock market supervisor said on Thursday it had opened disciplinary proceedings against Deutsche Bank over two alleged "very serious infringements" involving advice given to Spanish clients on financial instruments based on currencies.
Deutsche Bank said in a statement it was aware of the proceedings in relation to the historic sale of foreign exchange derivatives in Spain prior to April 2021.
"While we cannot comment on the specifics of the matter, as we have previously stated, the bank is reviewing and enhancing relevant processes and controls," Deutsche Bank added.
Spain's CNMV market supervisor said its move was based on facts that had also been determined by internal investigations carried out by Deutsche Bank. It added that the opening of proceedings did not prejudge their final outcome.
The CNMV said it had identified one very serious infringement for breaching transparency obligations and the duty of disclosure to clients and another for breaching the duty of acting in the best interest of its clients within the scope of structured OTC (over-the-counter) currency derivatives.
It fined Deutsche Bank 3 million euros ($3.32 million) in March 2022 for applying significantly higher spreads on clients' repurchase of structured bonds.
A spokesperson for the CNMV did not elaborate on the potential fine Deutsche Bank could face in relation to the proceedings on financial derivatives.
Under Spanish markets legislation, very serious infringements can lead to penalties of 5 million euros or 5 times the gross profit made or loss avoided as a result of the infringement, 5% of the infringing entity's own resources, 5% of the total funds, whether its own or those of third parties.
Fines could also climb to 10% of the total annual turnover of the offending entity.
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