← Broker database 2025-06-05
SG Americas Securities Fined $275,000 for TRACE Reporting Failures
According to FINRA, SG Americas Securities, LLC was censured and fined $275,000 for multiple failures in reporting transactions to FINRA's Trade Reporting and Compliance Engine (TRACE).
The firm's violations were extensive. First, it inaccurately reported transactions in TRACE-eligible securities without the required "No Remuneration" (NR) indicator. In multi-leg transactions where the firm executed offsetting transactions with a customer and a non-member affiliate at the same price without receiving remuneration, the firm was required to include the NR indicator but failed to do so due to a coding error during a system change.
Second, the firm failed to include the required Non-Member Affiliate Principal Transaction (NMAPT) indicator and inaccurately reported its capacity in certain trades. When both the firm and a non-member affiliate acted in a principal capacity in same-day transactions at the same price in the same security, the NMAPT indicator was required but not included. The firm also incorrectly reported acting in an agency capacity when it actually acted as principal.
Third, the firm failed to correctly identify covered depository institution contra-parties by their Market Participant Identifier (MPID) in multi-leg transactions involving a non-member affiliate that was a covered depository institution.
FINRA found that the firm failed to establish, maintain, and enforce a supervisory system and written supervisory procedures reasonably designed to achieve compliance with TRACE reporting obligations. The firm had no supervisory system to review reporting accuracy regarding NR and NMAPT indicators, executing capacity, or contra-parties. The firm's procedures also failed to address supervision of TRACE reporting.
TRACE reporting provides transparency in the fixed income markets and helps ensure fair pricing for investors. When firms fail to report accurately, it undermines the integrity of market data that investors and regulators rely upon. The firm subsequently remediated its systems and revised its supervisory procedures.