UBS has settled charges with the Financial Industry Regulatory Authority, agreeing to a censure and a $100,000 fine for failing to include the Non-Transaction Based Compensation indicator when reporting 91,059 municipal securities transactions to the Municipal Securities Rulemaking Board.
For this, UBS violated MSRB Rule G-14 on customer transaction reporting, which requires firms to report the applicable special condition indicators for transactions affected by those special conditions. The firm neither admitted nor denied FINRA's findings.
FINRA said the firm also violated MSRB Rule G-27 on supervisory procedures, as between July 2016 and December 2023, "the firm's supervisory system, including its written supervisory procedures, was not reasonably designed to ensure compliance with RTRS reporting requirements because the firm lacked any supervisory reviews or written procedures relating to the NTBC indicator," FINRA said. "In December 2023, the firm took steps to enhance its systems and procedures by adopting and implementing a quarterly supervisory review for the accurate reporting of the NTBC indicator."
The NTBC indicator is mandatory for customer trades that do not include a mark-up, mark-down or commission. The requirement to include the NTBC indicator became effective in 2016, and from July 2016 to July 2021, UBS excluded the indicator for all transactions in non-managed accounts, totalling 91,059. The firm then corrected the error in July 2021.
UBS has also been dinged by FINRA in the recent past for failing to timely report to the Trade Reporting and Compliance Engine (TRACE) roughly 3,850 transactions in TRACE-eligible securities from July 2018 to Sept. 2021.
"During that same period, the firm's supervisory system was not reasonably designed to achieve compliance with applicable TRACE reporting rules," FINRA said.
This all comes amid
UBS did not immediately respond to requests for comment for this story.
