A broker-dealer settled FINRA charges for deficient Order Audit Trail System ("OATS") reports and Regulation NMS quarterly order routing disclosures.
According to FINRA, the firm failed to identify "Not Held" orders (i.e., orders for which the firm had price and time discretion) on certain OATS reports. The firm also failed to report, as required by Rule 606 of Regulation NMS ("Disclosure of order routing information") and FINRA Rule 2010, "the material aspects of the firm's relationship with certain venues to which it routed non-directed orders for execution, including any arrangements for payment for order flow and any profit-sharing relationship." FINRA also charged the firm with related supervisory violations.
To settle the charges, the firm agreed to (i) censure and (ii) a fine of $90,000.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
