Merrill Lynch, Pierce, Fenner & Smith Incorporated has agreed to pay a fine of $2 million as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

From March 2010 to September 2020, the firm failed to accurately report to the Trade Reporting and Compliance Engine (TRACE) over two million retail customer transactions in TRACE-eligible securities, as defined in FINRA Rule 6710(a). Specifically, the firm reported incorrect execution times for approximately 1,576,000 primary market transactions in market-linked securities, in violation of FINRA Rules 6730(c)(8) and 2010.

The firm also under-reported 422,197 allocations of various TRACE-eligible securities to client accounts, in violation of FINRA Rules 6730(a)(4), 6730(a)(5), and 2010.

In addition, the firm failed to include the No Remuneration (NR) indicator for 179,734 U.S. Treasury securities transactions for which there was no transaction-based compensation, in violation of FINRA Rules 6730(d)(1), 6730(d)(4)(F), and 2010.

Further, from September 2017 to February 2019, the firm reported 65,335 municipal securities transactions for retail customers to RTRS that it should not have reported, in violation of MSRB Rule G-14(b).

Finally, the firm’s supervisory systems relating to TRACE and RTRS reporting were not reasonably designed in violation of NASD Rule 3010 and FINRA Rules 3110(a) and (b) and 2010 from March 2010 to September 20203 and MSRB Rule G-27 from September 2017 to December 2019.

In addition to the $2,000,000 fine, the firm has agreed to a censure.