IMC-Chicago, LLC dba IMC Financial Markets
The findings stated that the firm’s 21.8 billion inaccurate reports were caused by software coding and system issues, which persisted for a period spanning a few weeks to nearly two years, and its 6.9 billion late reports were caused by technology issues involving the firm’s connectivity to various exchanges and other broker-dealers.
After updating its reporting system, the firm remediated the issues that caused the CAT reporting violations, and has also submitted reports to the CAT Central Repository to correct over 99.9 percent of the late and inaccurate reports.
The findings also stated that the firm failed to establish and maintain a supervisory system, including WSPs, reasonably designed to achieve compliance with CAT reporting rules. From June 2020 to September 2020, the firm had no supervisory system in place to review the accuracy of the data it reported to CAT, nor did it maintain WSPs concerning its CAT reporting obligation.
The firm then began implementing a supervisory system, including WSPs, concerning CAT reporting requirements but the scope of its supervisory review was unreasonably narrow as the firm conducted a quarterly accuracy review of only three complete order cycles.
The firm later increased the quarterly accuracy review to one complete order cycle for equities and options for each of the over 10 market centers to which the firm sent orders.
The firm subsequently reduced the number of order events that it reviewed per quarter to two order cycles from each of the trading platforms that generated order and trade data that it reported to CAT.
The scope and frequency of the firm’s supervisory review for CAT reporting compliance was not reasonable given the volume of data that it reported to the CAT Central Repository. (FINRA Case #2020068719701)
