Interactive Brokers Fine $150K by FINRA Over Incomplete Data

Interactive Brokers has agreed to pay a $150,000 fine and accept a censure as part of a settlement with the Financial Industry Regulatory Authority (FINRA) for failing to provide certain customers with complete market data, FINRA announced.

The violations occurred from at least December 2017 to March 2022, when Interactive Brokers did not offer a consolidated display containing all elements required under the Vendor Display Rule for some customers. Specifically, customers who did not subscribe to real-time market data or purchase on-demand “snapshots” received incomplete information through the firm’s desktop, web-based, and mobile trading platforms.

Interactive Brokers Fine $150K by FINRA Over Incomplete Market Data

In these cases, the firm sometimes displayed a stock’s last sale price without the corresponding volume, market identification, or the stock’s national best bid and offer (NBBO). Additionally, the market data shown to these customers was delayed by 15 minutes, failing to reflect the required real-time prices, sizes, and market identifications.

In March 2022, Interactive Brokers updated its systems to provide all customers with a real-time consolidated display for NMS stocks at the point of order entry. By failing to provide accurate, consolidated market data for certain clients, the firm violated Rule 603(c) of Regulation NMS and FINRA Rule 2010.

FINRA also found deficiencies in the firm’s supervisory systems. From December 2017 to December 2022, Interactive Brokers failed to maintain and enforce a supervisory system or written supervisory procedures (WSPs) reasonably designed to ensure compliance with the Vendor Display Rule. The firm had no such systems from December 2017 through May 2021, and initial reviews of order entry points after implementing WSPs in June 2021 were incomplete.

As a result, Interactive Brokers also violated FINRA Rules 3110 and 2010. Alongside the $150,000 fine, the firm has agreed to a censure, underscoring the importance of accurate, real-time market data and robust supervisory systems in protecting investors.

Company Overview

Interactive Brokers caters to diverse requirements, offering competitive fees alongside a wide array of trading options such as stocks, ETFs, options, futures, and other global assets. It distinguishes itself as a top-tier brokerage, particularly appealing to traders and investors seeking a straightforward trading experience. With Interactive Brokers’ user-friendly platform, users can execute trades seamlessly, benefiting from competitive spreads that enhance cost-effectiveness. 

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