Standard Securities Capital Corp. has agreed to pay Market Regulation Services Inc. (RS) a fine of $80,000 and costs of $20,000 for its failure to implement adequate trade supervision and compliance policies and procedures over several years.
The settlement was approved today by a hearing panel in Toronto.
Between April 2002 and April 2004, Standard failed to implement trade supervision and compliance systems that were fully satisfactory to RS.
During this period, Standard’s trading policies and procedures did not meet the minimum requirements under UMIR 7.1. For example, the policies and procedures did not:
- adequately ensure compliance with the client priority rule;
- describe methodologies as to how Standard would conduct compliance testing, quantify and summarize compliance testing results, and report problems identified from testing results to management.
As well, Standard failed to maintain adequate evidence that it conducted compliance testing and failed to review its trading policies and procedures annually.
In entering the settlement, RS recognized that Standard undertook significant improvements to its trade supervision and compliance systems in 2004, and that RS’ trade desk review in 2005 reported no material deficiencies with Standard’s trade supervision and compliance system.
Details of the settlement can be found on RS’s website at www.rs.ca.