A broker-dealer settled FINRA charges for failing to (i) transmit required reportable order events ("ROEs") to the Order Audit Trail System ("OATS") and (ii) include complete and accurate information in quarterly reports required for compliance with Regulation NMS.
In a Letter of Acceptance, Waiver and Consent, FINRA alleged that the broker-dealer violated FINRA Rule 7450 ("Order Data Transmission Requirements") by not transmitting numerous ROEs required to be reported to OATS as a result of a coding error in the broker-dealer's order management system caused by the implementation of a system update. In addition, FINRA also found that the broker-dealer did not establish and implement a supervisory system reasonably designed to achieve compliance with FINRA rules relating to OATS reporting, in violation of FINRA Rules 3110 ("Supervision") and 2010 ("Standards of Commercial Honor and Principles of Trade").
FINRA also found that the broker-dealer failed to include, in its quarterly Regulation NMS Rule 606 ("Disclosure of Order Routing Information") reports, information regarding the material aspects of its relationship with each trading venue, including (i) descriptions of any payments for order flow and (ii) amounts per share or per order received.
To settle the charges, the broker-dealer agreed to a (i) censure and (ii) $40,000 fine ($15,000 for OATS violations, $15,000 for Rule 606 violations and $10,000 for violations of FINRA Rule 3110).
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