BNP Paribas

BNP Paribas Securities was censured, fined $650,000 for failing to aggregate credit thresholds for direct market access customers, and its written procedures did not reasonably guide supervisors in determining appropriate credit thresholds for customers.

Primarily, the financial risk management controls and supervisory procedures for its direct market access business were not reasonably designed to prevent the entry of erroneous orders.

The firm generally set the single-order quantity limit and single-order notional value limit for each customer at such high levels that the controls were not reasonably designed to prevent erroneous orders, absent additional reasonably designed controls, such as an average daily trading volume control.

The firm did not have any control for market access customer orders to prevent an unintended volume of orders arising from malfunctioning algorithms, software programs or trading systems, such as a throttle control.

In addition, because of the firm’s unreasonable financial risk management controls and supervisory system, it failed to prevent the transmission of erroneous orders to the markets.