FINRA fines JPMorgan Securities for failure to comply with Regulation SHO

JP Morgan Clearing Corporation, now known as JP Morgan Securities LLC, has agreed to pay a fine of $300,000 as a part of a settlement with the Financial Industry Regulatory Authority (FINRA).

The settlement stems from the firm’s alleged violations of Regulation SHO.

The Securities and Exchange Commission (SEC) adopted Regulation SHO to address concerns regarding potentially abusive “naked” short selling. Regulation SHO imposes requirements on broker-dealers with respect to sales of equity securities.

These requirements include the so-called “penalty box” provision, which restricts short selling in securities when the close out requirement is not satisfied unless the broker-dealer borrows or arranges to borrow the security.

The regulation also provides that a broker-dealer may allocate a close out obligation to another broker-dealer. The notice of allocation must be clear as to the allocation of responsibility and quantity of the fail to deliver.

From July 2009 through September 2015, JP Morgan sent emails to allocate the responsibility of close out fail to deliver positions to two introducing broker-dealers. JP Morgan’s allocation notices, however, did not make it reasonably clear that the firm was allocating responsibility for closing out the fails to the IBs.

As a result, certain fail to deliver positions the firm sought to allocate were not closed as required by Regulation SHO and securities that were subject to the close out requirement were not put in the “penalty box”.

In addition, rather than looking at its own books and records, the firm determined whether to purchase securities to close out a fail by reviewing whether fails were closed out on an account level basis.

FINRA has also found that JP Morgan’s supervisory system was not reasonably designed to achieve compliance with Regulation SHO’s Rule 204 (d). This is despite the firm’s reliance on allocations to close out fails on a daily basis.

On top of the fine, JP Morgan has agreed to a censure.

Posted on

210 Replies to “FINRA fines JPMorgan Securities for failure to comply with Regulation SHO”

  3. Thanks , I have just been searching for infoabout this topic for ages and yours is the greatestI’ve discovered so far. However, what in regards to the bottom line?Are you positive concerning the source?

  6. Amazing! Its in fact awesome piece of writing, I have got much clear idea concerning from this paragraph.

  7. It’s in fact very complex in this busy life to listen news on TV,so I only use internet for that reason, and takethe most up-to-date information.

  11. That is a good tip particularly to those new to the blogosphere. Simple but very accurate informationÖ Many thanks for sharing this one. A must read post!

  18. Whoa! This blog looks just like my old one! It’s on a entirelydifferent subject but it has pretty much the same layout and design.Outstanding choice of colors! asmr 0mniartist

  27. An interesting dialogue is value comment. I feel that it’s best to write more on this topic, it may not be a taboo subject however usually individuals are not sufficient to talk on such topics. To the next. Cheers

  32. Greetings! This is my first visit to your blog! We are a collection of volunteers and starting a new initiative in a community in the same niche. Your blog provided us valuable information to work on. You have done a wonderful job!

  33. Hello! Do you know if they make any plugins to protect againsthackers? I’m kinda paranoid about losing everything I’veworked hard on. Any suggestions?

  36. Oh my goodness! Awesome article dude! Thanks, However I am encountering difficulties with your RSS. I donít know why I am unable to join it. Is there anybody having similar RSS issues? Anyone who knows the answer will you kindly respond? Thanks!!

  41. Hi There. I discovered your blog employing msn. That is a very well published report. I’ll be sure to bookmark it and return to browse additional within your valuable information. Thanks to the put up. I’ll absolutely return

  45. A fascinating discussion is worth comment. I assume that you need to create more on this subject, it might not be a taboo subject however normally individuals are not enough to speak on such subjects. To the next. Thanks

  46. I needed to thank you for this excellent read!! I certainly enjoyed every bit of it. I have got you book marked to look at new things you post…

  47. Hi there just wanted to give you a brief heads up andlet you know a few of the pictures aren’t loading correctly.I’m not sure why but I think its a linking issue. I’ve triedit in two different internet browsers and both show the same results.

  49. A motivating discussion is definitely worth comment. I believethat you ought to publish more about this issue, it might not be ataboo subject but typically people do not talk about such topics.To the next! Best wishes!!

  73. hello!,I love your writing so much! proportion we keep in touch extra approximately your article on AOL? I require an expert in this house to unravel my problem. Maybe that’s you! Taking a look ahead to look you.

  82. Hi there! I could have sworn I’ve been to this blog before butafter browsing through a few of the articles I realized it’s new to me.Anyhow, I’m certainly delighted I stumbledupon it and I’ll be book-marking it and checking back regularly!

  84. You can definitely see your expertise within thearticle you write. The arena hopes for even more passionatewriters such as you who aren’t afraid to mention how they believe.At all times go after your heart.

  93. Whoa! This blog looks exactly like my old one! It’s on a entirely different subject butit has pretty much the same layout and design. Wonderful choice of colors!

  94. Wow! This blog looks just like my old one! It’s on a totallydifferent topic but it has pretty much the same layout anddesign. Excellent choice of colors!

  115. It’s fantastic that you are getting thoughts from this piece of writing as well as fromour discussion made here.

  117. These are truly great ideas in regarding blogging.You have touched some fastidious things here. Any way keep up wrinting.my blog post interior architecture schools

  119. What’s up friends, how is everything, and what you wish for to say concerning this post,in my view its actually amazing in support of me.

  122. Hello.This article was extremely fascinating, especially since I was searching for thoughts on this subject last Monday.Check out my blog Radical Slim Keto Diet

  123. When I initially commented I clicked the “Notify me when new comments are added” checkbox and now eachtime a comment is added I get several e-mails with the same comment.Is there any way you can remove people from that service?Many thanks!

  126. What’s up colleagues, how is everything, and what you desire to say on the topic of this piece of writing, in my view its genuinely amazing in support ofme.

  141. In all localities of the world, there are lonely people who yearn to find a trustworthy and loyal man.Therefore, you can use the search in different cities.The effectiveness of communication largely depends on the topics selected for communication.

  142. Hi, the whole thing is going nicely here and ofcourse every one is sharing facts, that’s genuinely fine, keep up writing.

  150. Dünyanın her tarafından milyonlarca oyuncu ile en iyi ücretsiz Rulet oyununu oyna! 3D grafik özellikleriyle tüm rulet çeşitlerini sunan gerçekçi bir Rulet … Rulet

  153. Thank you, I’ve just been searching for info about this topic for a while and yours is the best I’ve found out so far. However, what in regards to the conclusion? Are you sure in regards to the supply?

  171. Normally I don’t learn article on blogs, however I would like to say thatthis write-up very compelled me to take a look at anddo so! Your writing taste has been amazed me. Thanks, quite nicepost.

  173. Generally I do not learn post on blogs, however Iwould like to say that this write-up verypressured me to check out and do it! Your writing taste hasbeen surprised me. Thanks, quite nice article.

  181. This is one awesome article post.Really looking forward to read more. Really Cool.

  193. I do believe all of the ideas you have introduced for your post. They are really convincing and will definitely work. Still, the posts are very short for beginners. May you please lengthen them a bit from subsequent time? Thanks for the post.

  199. I’ll immediately snatch your rss as I can’t in finding your e-mail subscription link or e-newsletter service. Do you have any? Kindly let me recognise so that I could subscribe. Thanks.

  206. Heya i am for the first time here. I came across this board and Ito find It really helpful & it helped me out a lot. I hope to offer one thing back and aidothers such as you aided me.

  207. Hi, I do think this is an excellent blog. I stumbledupon it 😉 I may come back once again since i have book-marked it. Money and freedom is the best way to change, may you be rich and continue to guide other people.

  210. At this time I am going away to do my breakfast, later than havingmy breakfast coming yet again to read additional news.

Leave a Reply

Your email address will not be published. Required fields are marked *