Firm Settles Charges For Market Access Rule Violations

A broker-dealer settled charges for failure to establish reasonable risk management protocols and supervisory efforts regarding Exchange Traded Product ("ETP") order flow.

In separate Letters of Acceptance, Wavier and Consent, the exchanges found that the firm did not establish or maintain risk management protocol or supervisory procedures that would prevent the acceptance of trades that exceeded the maximum price or size parameters set by the Exchange Act.

As a result of these findings, the exchanges determined that the firm violated (i) SEA Rule 15c3-5(b), which requires broker-dealers with market access to establish reasonable risk management protocols, (ii) SEA Rule 15c3-5(c)(1)(ii), which requires firms to establish written supervisory and risk management procedures designed to prevent incorrect orders, and (iii) various exchange rules requiring firms supervise compliance.