Electronic Trading Platform Settles SEC Charges For Registration Failure

An operator of an order and execution management system ("OEMS") that facilitates electronic trading settled SEC charges for failing to register as a broker-dealer. According to the SEC, this is the first ever SEC enforcement action against an OEMS provider for operating without registering as a broker-dealer.

In the Order, the SEC stated that the entity running the platform had been originally registered as a broker-dealer, but withdrew its broker-dealer registration after being acquired by another company. The SEC found that the platform continued to charge its customer-selected broker-dealers with transaction fees. The SEC stated that the platform replicated its authentication database to set up a local server for one of its most active and longstanding customers, suggesting that this may have created a loss of customer privacy.