NYSE Arca Fines Interactive Brokers $237K for Alleged Reporting Violation

Electronic US trading exchange, NYSE Arca has slapped Interactive Brokers with a fine of $237,500 for alleged violations in trade reporting.

The brokerage company has already consented with the censure and the fine but did not admit or deny the allegations.

“Interactive Brokers hereby accepts and consents, without admitting or denying the findings, and solely for the purposes of this proceeding and other proceedings brought by or on behalf of NYSE Arca, or to which NYSE Arca is a party,” Interactive Brokers stated on the acceptance letter.

The letter detailed that the brokerage allegedly violated the reporting regulations by providing inaccurate codes to the exchange while reporting more than 525,000 options orders.

The brokerage executed the orders on-behalf of 12 firm customers and comprised nearly 2.1 million contracts.

The alleged violation happened between January 8, 2015, and November 29, 2019.

Crucial Pieces of Information 

“Origin codes are important because, among other things, they may affect the accuracy of the Exchange’s audit trail, which may impact the Exchange’s surveillance for compliance with Exchange roles and federal securities laws,” the letter explained.

“In addition, origin codes must be accurate as part of ensuring that trades are reported to the Options Clearing Corporation with accurate trade details.”

It is to be noted that the brokerage had created and maintained accurate records, but failed to recognize some glitch in its order routing connections with the exchange that resulted in the misreporting.

“The Firm now utilizes a surveillance that reviews all connections to the Exchange and compares the origin codes routed externally with the origin code maintained internally to identify any inconsistencies,” the letter added.

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