The National Futures Association (NFA) has charged Tullett Prebon Financial Services, an Introducing Broker, for multiple possible violations of its compliance rules, the self-regulatory body announced last week.

The official complaint detailed that the Introducing Broker did not keep voice recordings of telephone calls associated with a block trade which was brokered by two TPFS APs on both the  Buy-Side  Buy-Side The buy-side is comprised of firms in the financial industry that purchase securities and are accompanied by account investment managers, pension funds, and hedge funds.The buy-side is composed of those that buy and invest large sums of securities with the intention of generating a lucrative return or have their funds managed. The Buy-Side ExplainedIn terms of Wall Street, the buy-side includes investment institutions that purchase securities, stocks, or other financial instruments with the aim of satisfying their client’s portfolio demands. Through the analysis and acquisition of underpriced assets, buy-side entities purchase these assets with the prediction that they will appreciate. Moreover, the largest buy-side participants include firms such as BlackRock, The Vanguard Group, and UBS Group to name a few. It is important to note that firms such as BlackRock are able to influence market prices as a result of placing large investments under single entities while the Securities and Exchange Commission (SEC) requires a quarterly 13-F filing for all holdings bought or sold by buy-side managers. What differentiates buy-side investors from other traders would be the advantages that are yielded to them. Buy-side investors not only have access to a much broader range of trading resources and market insight but also tend to possess decreased trading costs through large lot acquisitions. To sum up, firms work with buy-side analysts to provide research recommendations that are kept exclusive to those participants of the firm while all analysts are overseen by regulations set forth by the International Organization of Securities Commissions (IOSCO). The buy-side is comprised of firms in the financial industry that purchase securities and are accompanied by account investment managers, pension funds, and hedge funds.The buy-side is composed of those that buy and invest large sums of securities with the intention of generating a lucrative return or have their funds managed. The Buy-Side ExplainedIn terms of Wall Street, the buy-side includes investment institutions that purchase securities, stocks, or other financial instruments with the aim of satisfying their client’s portfolio demands. Through the analysis and acquisition of underpriced assets, buy-side entities purchase these assets with the prediction that they will appreciate. Moreover, the largest buy-side participants include firms such as BlackRock, The Vanguard Group, and UBS Group to name a few. It is important to note that firms such as BlackRock are able to influence market prices as a result of placing large investments under single entities while the Securities and Exchange Commission (SEC) requires a quarterly 13-F filing for all holdings bought or sold by buy-side managers. What differentiates buy-side investors from other traders would be the advantages that are yielded to them. Buy-side investors not only have access to a much broader range of trading resources and market insight but also tend to possess decreased trading costs through large lot acquisitions. To sum up, firms work with buy-side analysts to provide research recommendations that are kept exclusive to those participants of the firm while all analysts are overseen by regulations set forth by the International Organization of Securities Commissions (IOSCO). Read this Term and  Sell-Side  Sell-Side Those in the financial industry involved with the production, marketing, and the sale of bonds, forex, stocks, and other financial instruments constitute the sell-side.Products and services produced by the sell-side are geared towards those who on the buy-side. You can think of the sell-side and buy-side like a coin, you cannot have one side without the other. The sell-side is comprised of individuals, firms, fintech companies, and market makers, who are responsible for providing liquidity in the market.Providing analysis and market insight for the buy-side, the sell-side attempts to secure the highest price rates for every financial instrument supported while any entity that purchases stock resides within the buy-side. What Makes Up the Sell-Side?In the foreign exchange market, multinational banks like JP Morgan, UBS, and Citibank compose the sell-side while the trading rooms for these banks are segmented into two groups. The first group is made up of interbank traders who purchase or sell large currency sums of currency on the forward and spot markets.Conversely, the second group is comprised of marketers who sell securities to clients on the buy-side, such as mutual and hedge funds and large businesses. In the stock market sell-side, investment banks sell stocks to both institutional and retail investors, take trading positions, and underwrite stock issuance.This means that they raise investment capital in the form of both equity and capital debt for entities who issue securities. Initial public offerings (IPOs) are one of the most anticipated events for the sell-side of the stock market. Th bond market sell-side has been pretty much monopolized by investment banks such as Goldman Sachs and Morgan Stanley. Banks that underwrite and service bond issues is a joint commercial single holding company of both Bank of America Merrill Lynch and JP Morgan Chase, who also are the primary dealer of U.S. Treasury Bonds while these banks are quite active with the purchasing and trading of the bond market. Those in the financial industry involved with the production, marketing, and the sale of bonds, forex, stocks, and other financial instruments constitute the sell-side.Products and services produced by the sell-side are geared towards those who on the buy-side. You can think of the sell-side and buy-side like a coin, you cannot have one side without the other. The sell-side is comprised of individuals, firms, fintech companies, and market makers, who are responsible for providing liquidity in the market.Providing analysis and market insight for the buy-side, the sell-side attempts to secure the highest price rates for every financial instrument supported while any entity that purchases stock resides within the buy-side. What Makes Up the Sell-Side?In the foreign exchange market, multinational banks like JP Morgan, UBS, and Citibank compose the sell-side while the trading rooms for these banks are segmented into two groups. The first group is made up of interbank traders who purchase or sell large currency sums of currency on the forward and spot markets.Conversely, the second group is comprised of marketers who sell securities to clients on the buy-side, such as mutual and hedge funds and large businesses. In the stock market sell-side, investment banks sell stocks to both institutional and retail investors, take trading positions, and underwrite stock issuance.This means that they raise investment capital in the form of both equity and capital debt for entities who issue securities. Initial public offerings (IPOs) are one of the most anticipated events for the sell-side of the stock market. Th bond market sell-side has been pretty much monopolized by investment banks such as Goldman Sachs and Morgan Stanley. Banks that underwrite and service bond issues is a joint commercial single holding company of both Bank of America Merrill Lynch and JP Morgan Chase, who also are the primary dealer of U.S. Treasury Bonds while these banks are quite active with the purchasing and trading of the bond market. Read this Term.

“TPFS was unable to produce the voice recordings NFA requested because the firm had failed to retain the voice recordings for either AP involved on January 7, 2020 block trade,” the complaint stated. Tullett Prebon did not recognize the phone recording violation until the regulatory body requested it in an examination of the firm.

Additionally, the self-regulator charged the company for failing to establish and maintain an adequate system to supervise its member employees’ recordkeeping activities and communications. This issue went undetected by the firm for around 18 months.

These companies are obligated to diligently supervise the member employees’ commodity interest activities.

“The firm also failed to detect or ignored an error on a telecommunication report the IT department utilized during the 2018 office move since the report listed the incorrect retention period of 96 hours for one of the affected APs,” the complaint added.

The Decision Is Yet to Be Made

For the two charges, Tullett Prebon is looking at expulsion or suspension from its NFA membership for a specified period. Moreover, it might be censured, along with a monetary penalty of up to $500,000 for each violation count. Additionally, the regulator can issue a cease and desist order or other penalties which might not be inconsistent with regular penalties.

Headquartered in New York, Tullett Prebon Financial Services operates as an Introducing Broker and has been an NFA member since 2003. It has around 70 registered associated persons (APs) and offers intermediary services to institutional customers.