The Financial Industry Regulatory Authority (FINRA) has fined Virtu Americas LLC for alleged rule violations.

From March 2020 until August 2022, Virtu failed to establish a supervisory system, including written supervisory procedures (WSPs), reasonably designed to achieve compliance with Reg NMS Rule 604 and FINRA Rule 6460.

From March 2020 until May 2021, Virtu’s supervisory reviews were not reasonably designed to detect potential violations of Reg NMS Rule 604 and FINRA Rule 6460. In March 2020, Virtu became aware that the automated exception reports used by the firm to detect potential violations of Reg NMS Rule 604 and FINRA Rule 6460 had ceased functioning.

Virtu tasked a compliance group employee with conducting a manual review of limit orders to identify potential violations of Reg NMS Rule 604 and FINRA Rule 6460 while the automated exception reports were not functioning. However, the firm could not reasonably rely on the manual review due to the volume of limit orders.

Additionally, in June 2021 the compliance group employee responsible for performing the manual reviews departed from the firm. As a result, from June 2021 until August 2022, Virtu did not conduct any manual reviews for potential Reg NMS Rule 604 and FINRA Rule 6460 violations. In August 2022, the firm implemented a new automated exception report.

In addition, Virtu’s WSPs were not reasonably designed. Between March 2020 and August 2022, Virtu’s WSPs did not describe what should be considered by firm personnel to determine whether any violations of Reg NMS Rule 604 or FINRA Rule 6460 had actually occurred.

Further, from March 2020 through May 2021, the WSPs did not describe the manual review, including the steps to take in conducting the manual review such as the volume, frequency, or sampling methodology to be employed.

In August 2022, Virtu implemented updated WSPs to monitor for compliance with FINRA Rule 6460 and Reg NMS Rule 604 to ensure the firm’s automated systems designed to display customer orders as required by FINRA Rule 6460 and Reg NMS Rule 604 were functioning properly.

As a result of Virtu’s unreasonably designed supervisory system and WSPs, in isolated instances the firm failed to review customer limit orders that it potentially failed to timely display.

Therefore, Virtu violated FINRA Rules 3110 and 2010.

Virtu has agreed to the imposition of the following sanctions:

• a censure and
• a $100,000 total fine, of which $20,000 must be paid to FINRA. The remainder of the fine must be allocated to Cboe BZX Exchange, Inc.; Nasdaq BX, Inc., Nasdaq Stock Market LLC; and New York Stock Exchange LLC.