Morgan Stanley

Morgan Stanley was censured and fined $1,100,000 for market access rule deficiencies. The firm did not properly establish controls reasonably designed to prevent the entry of orders that exceeded pre-set credit thresholds on a customer basis, instead relying on an overall firm credit limit.

There were gaps in trade surveillance system settings (including those of a third-party system), for e.g. lacking ADV or too far off the NBBO, which were deemed not be reasonable in order to prevent erroneous orders.

It also failed to have any automated pre-trade soft or hard-blocks to prevent the submission of orders that breached its aggregate capital limit - instead, the firm’s system generated alerts that required real-time, manual intervention in order to prevent orders from accessing the market, which would not impede the submission of orders unless and until firm personnel interceded to halt an order.