A broker-dealer settled Nasdaq Options Market ("NOM") charges for failing to provide two-sided quotations for the amount of time required to meet the continuous quoting obligation on the ISE Gemini Exchange. Nasdaq found that the firm failed to provide "two-sided quotations in 60 percent of the cumulative number of seconds for which its assigned options series were open for trading" on 19 trade dates. As a result, Nasdaq determined that the broker-dealer violated NOM Rules Options 2, Section 4(a) ("Obligations of Market Makers") and Options 2, Section 5(d)(1) ("Intra-day Quotes").
In addition, Nasdaq found that the broker-dealer:
- used a quoting bot that was referencing stale data, so the broker-dealer could not identify its failure to quote in these instances; and
- did not have written supervisory procedures in place regarding market making, relevant markets or rules, reviews, supervision or documentation.
As a result, Nasdaq determined that the broker-dealer violated NOM Rules Options 9, Section 2(b) ("Business Conduct"), General 9, Section 20 ("Supervision") and General 9, Section 1 ("General Standards").
To settle the charges, the broker-dealer agreed to (i) a censure, (ii) a $35,000 fine and (iii) an undertaking to remedy the above-described deficiencies.
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