According to FINRA, GTS Securities LLC has been censured and fined $150,000 for publishing inaccurate monthly execution quality reports required under SEC Regulation NMS Rule 605.

Due to multiple coding errors, over 80 percent of the approximately 25,000 orders the firm included in its reports did not meet the definition of covered order and should not have been included. The coding errors also caused the firm to report inaccurate share quantities in time-to-execution groupings and inaccurate average realized spreads.

Rule 605 requires market centers to publish monthly reports containing standardized information about order execution quality, including effective spreads and execution speed. These reports help investors and broker-dealers evaluate execution quality when deciding where to route orders.

FINRA identified these inaccuracies during an examination. A month later, the firm began using a third-party vendor to prepare its Rule 605 reports and subsequently published corrected versions of 23 reports.

The firm also failed to establish, maintain, and enforce a supervisory system reasonably designed to achieve compliance with Rule 605. Specifically, the firm had no supervisory reviews or written procedures to ensure only covered orders were included in reports and no reasonable reviews to determine whether statistical data was being accurately calculated.

What Investors Can Learn: Execution quality statistics help investors understand how well their orders are being handled. When these reports are inaccurate, investors cannot make informed decisions about order routing. This case underscores the importance of accurate market transparency data.