Broker-Dealer Fined for Muni Trade Reporting Violations

A broker-dealer that "operates an alternative trading system for the trading of fixed income securities," settled FINRA charges for failing to properly report certain municipal securities transactions to the MSRB's Real-Time Transaction Reporting System ("RTRS").

According to the AWC, the broker-dealer failed to include the required Non-Transaction-Based Compensation ("NTBC") indicator on 145,898 municipal securities transactions executed during the relevant period. FINRA found that the reporting failures resulted from a technical error following the broker-dealer's transition to a new clearing firm.

FINRA explained that including the NTBC in the reports "is mandatory for customer trades that do not include a mark-up, mark-down, or commission." FINRA said that the NTBC "improves price transparency by distinguishing between transaction prices that include some form of transaction-based dealer compensation and those that do not."

FINRA concluded that the broker-dealer violated MSRB Rule G-14 ("Reports of Sales or Purchases").

To settle the charges, the broker-dealer agreed to (i) a censure and (ii) pay a $65,000 fine.