A firm settled NYSE Arca charges for failing to maintain sufficient erroneous order controls and related written supervisory procedures ("WSPs").
In a Letter of Acceptance, Waiver and Consent, NYSE Arca alleged that the firm failed to:
- maintain a hard-block price control, which enabled an erroneous order to go through;
- provide NYSE Arca with an explanation as to why it chose its control settings and how they were reasonable, given the firm's trading activity;
- implement written supervisory procedures with respect to intraday customer credit limit changes;
- sufficiently document justifications for intraday changes to customer credit limits; and
- include in its WSPs details as to how it conducts its annual SEA Rule 15c3-5 ("Risk Management Controls for Brokers or Dealers with Market Access") controls and procedures review process.
As a result of its findings, NYSE Arca determined that the firm violated SEA Rules 15c3-5(c) and (e), and NYSE Arca Rule 11.18 ("Supervision").
To settle the charges, the firm agreed to (i) a censure and (ii) a $40,000 fine.
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