A broker-dealer settled charges by the Cboe BZX, C2 and EDGX exchanges for origin code violations and related supervisory violations.
In the Letters of Consent, the exchanges found that the broker-dealer, which was not registered as a market maker on any of the exchanges, mismarked "Away Market Maker" capacity orders requiring the origin code "N" with an origin code "M" for "Market Maker" capacity. The error occurred because the broker-dealer did not update its order routing systems' coding logic.
Further, the exchanges found that the broker-dealer's written supervisory procedures governing origin codes did not address specific capacity designations and, to that end, the application of the "Away Market Maker" or "Market Maker" origin codes.
As a result, the exchanges determined that the broker-dealer violated:
- Section 17(a)(1) of the Exchange Act and SEA Rule 17a-3 ("Records to be made by certain exchange members, brokers and dealers") thereunder;
- BZX Rules 18.1 ("Adherence to Law"), 18.2 ("Conduct and Compliance with the Rules"), 20.7 ("Audit Trail"), 24.1 ("Maintenance, Retention and Furnishing of Books, Records and Other Information") and 5.1 ("Written Procedures");
- C2 Rules 4.2 ("Adherence to Law"), 15.1 ("Maintenance, Retention and Furnishing of Books, Records and Other Information"), 4.22 ("Communications to the Exchange or the Clearing Corporation"), 6.9 ("Entry and Cancellation of Orders") and 4.24 ("Supervision"); and
- EDGX Rules 18.1 ("Adherence to Law"), 18.2 ("Conduct and Compliance with the Rules"), 20.7 ("Audit Trail"), 24.1 ("Maintenance, Retention and Furnishing of Books, Records and Other Information") and 5.1 ("Written Procedures").
To settle the charges, the broker-dealer agreed to (i) a censure and (ii) payment of an $18,000 fine to BZX and fines of $1,000 to each of C2 and EDGX.
Primary Sources
- Cboe BZX Exchange Enforcement Release 20190630126 - Credit Suisse Securities (USA) LLC - 10/13/2021
- Cboe C2 Options Exchange Enforcement Release 20190630126 - Credit Suisse Securities (USA) LLC - 10/13/2021
- Cboe EDGX Exchange Enforcement Release 20190630126 - Credit Suisse Securities (USA) LLC - 10/13/2021
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