According to FINRA, Merrill Lynch, Pierce, Fenner & Smith Incorporated (CRD #7691), based in New York, New York, was censured and fined $2,000,000 for multiple trade reporting failures involving TRACE-eligible securities and municipal securities. The firm consented to these sanctions without admitting or denying the findings. FINRA found that Merrill Lynch failed to accurately report execution times for certain primary market transactions in TRACE-eligible securities. The misreporting occurred because the firm failed to include a field for execution time for market-linked primary market transactions when they became TRACE reportable. The firm's systems misclassified each transaction's processing time as the execution time, resulting in inaccurate reports to TRACE. FINRA also found that the firm failed to report certain allocations of TRACE-eligible securities to client accounts as separate transactions. Instead of reporting each customer allocation individually, the firm reported block transactions as single transactions. Additionally, the firm failed to include the No Remuneration (NR) indicator for transactions in U.S. Treasury securities that did not include transaction-based compensation, because the firm incorrectly concluded the NR indicator was not required for Treasury transactions. FINRA further found that the firm reported municipal securities transactions to the Real-time Transaction Reporting System (RTRS) that it should not have reported. These were transactions executed by a third-party dealer for which Merrill Lynch acted only as custodian. The over-reporting occurred because the firm failed to code its systems to suppress reporting for such transactions. The firm's supervisory system was found to be inadequate for achieving compliance with both TRACE and MSRB reporting rules. The firm lacked reasonable supervisory reviews and written procedures relating to over-reporting, under-reporting, accuracy of execution times, and NR indicators. The firm subsequently corrected these issues and reported them to FINRA. For investors, accurate trade reporting is the foundation of market transparency. TRACE and RTRS data are used by regulators, market participants, and investors to evaluate bond pricing and market activity. When a firm as large as Merrill Lynch fails to accurately report transactions, it can distort the data that the entire market relies upon for fair and efficient pricing of fixed income securities.