Nasdaq BX Fines Firm for Quoting Lapses

A firm settled Nasdaq BX, Inc., ("the Exchange") charges for failing to meet continuous quoting obligations.

According to the AWC, an Exchange member firm, acting as a Lead Market Maker on BX Options, failed to provide two-sided quotes for 22 trading days, which represented 90% of the time its assigned options series were open for trading. BX found that the quoting failures were the result of a system misconfiguration that caused the firm to quote too few options series to meet its obligations.

The Exchange also found that the firm's quoting surveillance system was not properly configured to detect most of the quoting violations. The Exchange found that the firm's written supervisory procedures misrepresented how frequently it reviewed its surveillance reports.

The Exchange determined that the firm violated Nasdaq Rule Options 2, Section 4(j)(1) ("Obligations of Market Makers and Lead Market Makers"), General 9, Sections 20(a) and 1(a) ("Supervision") and Options 9, Sections 2(a) and (b)(1) ("Adherence to Law and Compliance with BX Options Rules").

To settle the charges, the firm agreed to (i) a censure and (ii) pay a fine of $35,000.