Pershing is being fined and censured by Finra for failing to report fractional share trades executed for customers for 16 years, the self-regulatory agency disclosed Tuesday.
The BNY Mellon company lacked a supervisory system for complying with the required reporting to the Finra/Nasdaq Trade Reporting Facility and the Over-the-Counter Reporting Facility, with about five million such trades going unreported during a sample time period between June 2012 and June 2023.
“As a result, Pershing did not pay the regulatory transaction fees associated with these trades,” Finra stated Tuesday in a letter of acceptance, waiver, and consent signed by Pershing.
The regulator requires that trades made for customers that include fractions of full shares be reported and have a transaction fee paid.
As part of the agreement, Pershing is paying a $175,000 fine and is supporting “an undertaking to pay the regulatory transaction fees as required for unreported fractional share trades executed between June 1997 and June 2023,” according to the disclosure.
“Pershing is pleased to have resolved this matter. We take our regulatory and compliance responsibilities very seriously,” a company spokesperson said in an email statement to InvestmentNews.
Under Finra’s trade reporting rules, its member firms have to provide data about equity securities transactions within 10 seconds of such trades. While fractional shares can’t be entered into the systems, trades must be rounded up to full shares for reporting purposes.
Last year, the regulator included fractional share trade reporting in its report on its examination and risk monitoring program.
“The data that members report has a direct impact on the accuracy of public information FINRA disseminates,” the regulator said in the Pershing letter, adding that a lack of disclosure can affect its surveillance patterns.
“Finra relies on the accuracy of trade reporting to reconstruct and review the activities of market participants in order to safeguard the integrity of the securities markets and protect investors,” the letter stated. “Accurate recordkeeping also enables member firms to establish and maintain a supervisory system reasonably designed to achieve compliance with applicable securities laws and regulations.”
Britt is named CFO of Wipfli, a $600 million accounting firm that audits two NFL franchises
The acquisition pairs Zephyr's 21,000-product separately managed account database with Y Charts' newly launched AI agent assistant for investment research.
The war for talent continues in the Sunshine State with as Truist and RayJay teams managing a collective $1 billion in client assets defect to other firms.
Americans now estimate they need $1.2 million to retire comfortably, but rising costs and debt are making that goal increasingly difficult to reach.
Crewe Advisors' Ryan Halliday and Accelerated Wealth Partners' Eric Amar suggest mega RIA's readiness to integrate — not just scale — will determine whether an IPO exit actually works.
Northern Trust’s Ken Lassner shows advisors how to convert volatility into after-tax portfolio gains
Dan Biagini of American Equity says the steady decline of pensions, longer lifespans and a reset in interest rates are rewriting how advisors build retirement income
