FINRA Fines BBVA Securities for TRACE Reporting Deficiencies

BBVA Securities Inc. has been fined $175,000 by the Financial Industry Regulatory Authority (FINRA) as part of a settlement over deficiencies in its Trade Reporting and Compliance Engine (TRACE) reporting. The penalty comes after an investigation revealed significant lapses in BBVA's compliance with FINRA's reporting requirements.

Between July 2016 and January 2023, BBVA Securities failed to include a required indicator on approximately 50,000 TRACE reports. This omission was a direct violation of FINRA Rule 6730, which mandates the inclusion of specific indicators to ensure accurate and complete trade reporting.

The investigation also uncovered that BBVA Securities had not established or maintained a supervisory system adequate to ensure compliance with TRACE reporting requirements. This failure included a lack of effective written supervisory procedures designed to meet the standards outlined in FINRA Rule 6730.

Moreover, BBVA Securities did not review its TRACE reports for accuracy, which would have included verifying the presence of required indicators. This oversight resulted in violations of FINRA Rules 3110 and 2010, which mandate proper supervisory systems and adherence to regulatory requirements.

In addition to the $175,000 fine, BBVA Securities has agreed to a censure as part of the settlement. The censure serves as an official reprimand and a formal acknowledgment of the firm's regulatory shortcomings.

This settlement underscores the importance of robust supervisory systems and accurate trade reporting. FINRA's action highlights the need for financial firms to adhere strictly to reporting requirements and maintain effective compliance practices to avoid significant penalties.