WASHINGTON — The Financial Industry Regulatory Authority (FINRA) announced today that it has fined Deutsche Bank Securities Inc. $3.25 million for failing to provide the same information to all clients of its Alternative Trading System (ATS) relating to certain ATS services and features, and for related violations.
An ATS is a trading venue that executes trades in securities on behalf of broker-dealers and other traders. Securities and Exchange Commission (SEC) Regulation ATS requires that ATS operators disclose certain information to the SEC by filing a Form ATS. In its Form ATS, Deutsche Bank represented that it would provide all ATS users with “identical access to all services and features” offered by the ATS. FINRA found that Deutsche Bank, however, failed to timely or completely disclose to all users the availability of certain ATS services and features, most of which involved the ability to include or exclude counterparties or groups of counterparties against whom orders would execute. As a result, some ATS clients – including high-frequency trading firms – requested and received services that others may not have known were available. This meant that although there was no inappropriate sharing of confidential information, all users did not effectively have identical access to all services and features offered by the ATS.
FINRA found that Deutsche Bank also failed to have adequate supervisory procedures in place to ensure that it disclosed material information regarding the ATS’s services and features to all users and failed to provide accurate information in its Form ATS filings.
“ATSs are significant and important trading venues in today’s equity marketplace. Broker-dealers that operate an ATS must provide complete and accurate information to their customers regarding access to the ATS’s services and features to ensure that customers using the trading platform are not disadvantaged,” said Thomas Gira, Executive Vice President of FINRA’s Market Regulation Department.
In concluding this settlement, Deutsche Bank neither admitted nor denied the charges, but consented to the entry of FINRA’s findings.
Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA's BrokerCheck. FINRA makes BrokerCheck available at no charge. In 2015, members of the public used this service to conduct 71 million reviews of broker or firm records. Investors can access BrokerCheck at www.finra.org/brokercheck or by calling (800) 289-9999. Investors may find copies of this disciplinary action as well as other disciplinary documents in FINRA's Disciplinary Actions Online database. Investors can also call FINRA's Securities Helpline for Seniors at (844) 57-HELPS for assistance or to raise concerns about issues they have with their brokerage accounts and investments.
FINRA, the Financial Industry Regulatory Authority, regulates all securities firms doing business in the United States. FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business – from registering and educating all industry participants to examining securities firms, writing rules, enforcing those rules and the federal securities laws, and informing and educating the investing public. In addition, FINRA provides surveillance and other regulatory services for equities and options markets, as well as trade reporting and other industry utilities. FINRA also administers the largest dispute resolution forum for investors and firms. For more information, please visit www.finra.org.