Broker Settles Charges for LOPR Reporting Violations

A brokerage firm settled NYSE Arca, Inc. charges for failing to report OTC options positions to the Large Options Position Reporting system ("LOPR").

In a Letter of Acceptance, Waiver, and Consent, the exchange found that, in certain instances, the broker failed to report index options positions on their expiration date as a result of a coding error by a third-party service provider. The exchange stated that in several instances the broker failed to report options positions as "acting-in-concert" (positions held in different accounts that are required to be aggregated) because the broker and the third-party service provider did not coordinate their reporting. Additionally, the exchange found that the broker failed to maintain supervisory controls designed to monitor whether all required positions were reported to LOPR.

As a result, the exchange determined that the broker violated NYSE Arca Rule 6.6-O(a) ("Reporting of Options Positions") and Rule 11.18(b)-(c) ("Supervision"). To settle the charges, the broker agreed to (i) a censure and (ii) a $225,000 civil monetary penalty.