A trading firm settled NYSE Arca charges for incorrectly calculating its net capital.
In a Letter of Acceptance, Waiver, and Consent, NYSE Arca determined that the trading firm applied incorrect haircut and undue concentration deductions onto its positions at the firm's clearing firm, resulting in an overstatement of the firm's net capital. The firm also failed to notify the SEC and NYSE Arca of its net capital deficiencies. NYSE Arca determined that, among other things, the trading firm failed to create and maintain a supervisory system adequately designed to ensure compliance with the net capital and reporting requirements to which it is subject.
Primary Sources
NYSE Arca determined that the trading firm violated Sections 15(c) ("Use of manipulative or deceptive devices; contravention of rules and regulations") and 17(a) ("Rules and regulations") of the Exchange Act, SEA Rules 15c3-1 ("Net capital requirements for brokers or dealers"), 17a-5 ("Reports to be made by certain brokers and dealers") and 17a-11 ("Notification provisions for brokers and dealers") and NYSE Arca Rules 4.1-E ("Minimum Net Capital") and 11.18 ("Supervision").
To settle the charges, the trading firm agreed to (i) a censure and (ii) a $150,000 fine.
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