FINRA Fines RBC Capital Markets for Compliance Issues

RBC Capital Markets LLC Fined & Censured

According to FINRA, on May 3, 2017, RBC Capital Markets, LLC (CRD #31194, New York, New York) was issued an AWC in which the firm was censured, fined $225,000, required to revise its WSPs concerning transmitting accurate information to the Order Audit Trail System (OATS), and must offer rescission to the customers who executed the transactions at either the original purchase price or the current fair market value, whichever is higher.

Without admitting or denying the findings, the firm consented to the sanctions and to the entry of findings that it transmitted reports to OATS in which the special handling code field was not populated to indicate whether the orders were “held” or “not held.” The findings stated that the firm’s supervisory system did not provide for supervision reasonably designed to achieve compliance with respect to the applicable securities laws and regulations, and FINRA rules, concerning transmitting accurate information to OATS.

Specifically, the firm’s supervisory system did not include WSPs providing for a review of the firm’s OATS reports that was representative of the types of business in which the firm engaged to ensure its submissions were accurate.

The findings also stated that the firm failed to report transactions to the Trade Reporting and Compliance Engine (TRACE) in TRACE-eligible corporate debt securities that it was required to report.

FINRA found that the firm also failed to disclose all material facts concerning municipal securities transactions at or prior to the time of trade. Specifically, the firm failed to inform its customer that the municipal securities transaction was in an amount below the minimum denomination of the issue.

FINRA also found that the firm failed to report information regarding purchase and sale transactions effected in municipal securities to the Real-Time Transaction Reporting System (RTRS). For some of these instances, the firm reported block transactions that were to be allocated to separate managed accounts as a single block instead of reporting the allocations as individual transactions, as required.

For FINRA’s full findings see FINRA Case #2015046469501.

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This information, which is publicly available on FINRA’s website has been provided by The White Law Group.

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