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FINRA Fines BGC Financial $175K for TRACE Reporting Errors

by Arnab Shome
  • BGC reported the execution times in seconds instead of milliseconds.
  • The company agreed to settle with the self-regulatory agency.
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FINRA (Financial Industry Regulatory Authority) has slapped a fine of $175,000 on BGC Financial, along with a censure order, for the rules' violations around Trade Reporting and Compliance Engine (TRACE) reporting. The company agreed to pay the monetary penalty but did not accept or deny any charges.

FINRA Fines BGC Financials $175,000

FINRA fines BGC

The charges of the self-regulatory agency came for the lapses in the BGC’s reporting capabilities between 8 January 2020 and 20 October 2020. Specifically, the company failed to properly report the execution time of over 3.5 million US Treasury Securities transactions to TRACE reporting.

“FINRA Rule 6730(a) requires members to report a transaction in a TRACE-eligible security, including transactions in US Treasury Securities, on either the same day or no later than the next business day (depending on when the transaction was executed),” FINRA stated in the letter of acceptance, waiver and consent.

Though BGC captured the execution times of the transactions in milliseconds, the company reported the parameter for over 3.5 million Treasury transactions to TRACE in seconds, making it erroneous. These transactions represented 100 percent of BGC’s reported trades in US Treasury Securities.

Check out the latest FMLS22 session on "Market Data amid Global Turmoil and Accelerated Digitalization."

BGC Financial Settled Similar Violations Before

BGC Financial has been a FINRA member since 1987. It operates around trade execution, clearing , and post-trade services related to equities and fixed-income trade activity. In addition, the company settled with FINRA in August 2020 for $100,000 for similar TRACE reporting violations and other supervisory lapses. Then, the company imposed an undertaking to address the supervisory deficiencies.

Last November, New York-listed BCG Partners, the parent of BGC Financial, rebranded to BGC Group, Inc. The move came as a part of a broader strategy to simplify and reorganize the current institutional structure under a new Corporate Conversion Agreement.

Meanwhile, the company generated $416.6 million in revenue, which is 12.1 percent higher year-over-year, in the quarter that ended on 30 September 2022. The post-tax adjusted earnings amounted to $77.5 million, raising 4.1 percent, whereas the adjusted EBITDA jumped 14.3 percent to $107 million.

FINRA (Financial Industry Regulatory Authority) has slapped a fine of $175,000 on BGC Financial, along with a censure order, for the rules' violations around Trade Reporting and Compliance Engine (TRACE) reporting. The company agreed to pay the monetary penalty but did not accept or deny any charges.

FINRA Fines BGC Financials $175,000

FINRA fines BGC

The charges of the self-regulatory agency came for the lapses in the BGC’s reporting capabilities between 8 January 2020 and 20 October 2020. Specifically, the company failed to properly report the execution time of over 3.5 million US Treasury Securities transactions to TRACE reporting.

“FINRA Rule 6730(a) requires members to report a transaction in a TRACE-eligible security, including transactions in US Treasury Securities, on either the same day or no later than the next business day (depending on when the transaction was executed),” FINRA stated in the letter of acceptance, waiver and consent.

Though BGC captured the execution times of the transactions in milliseconds, the company reported the parameter for over 3.5 million Treasury transactions to TRACE in seconds, making it erroneous. These transactions represented 100 percent of BGC’s reported trades in US Treasury Securities.

Check out the latest FMLS22 session on "Market Data amid Global Turmoil and Accelerated Digitalization."

BGC Financial Settled Similar Violations Before

BGC Financial has been a FINRA member since 1987. It operates around trade execution, clearing , and post-trade services related to equities and fixed-income trade activity. In addition, the company settled with FINRA in August 2020 for $100,000 for similar TRACE reporting violations and other supervisory lapses. Then, the company imposed an undertaking to address the supervisory deficiencies.

Last November, New York-listed BCG Partners, the parent of BGC Financial, rebranded to BGC Group, Inc. The move came as a part of a broader strategy to simplify and reorganize the current institutional structure under a new Corporate Conversion Agreement.

Meanwhile, the company generated $416.6 million in revenue, which is 12.1 percent higher year-over-year, in the quarter that ended on 30 September 2022. The post-tax adjusted earnings amounted to $77.5 million, raising 4.1 percent, whereas the adjusted EBITDA jumped 14.3 percent to $107 million.

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