SEC-PR-2501-2 (Jan. 10, 2025) (SEC-PR-2501) Alternative Trading Systems Operator Liquidnet Charged with Violations of Market Access Rule and for Failing to Protect Confidential Subscriber Trading Information Excerpt: Washington D.C., Jan. 10, 2025 — The Securities and Exchange Commission today announced settled charges against broker-dealer Liquidnet Inc., an operator of multiple alternative trading systems (ATSs), for […]
Category: Market Access Rule Violations
The Market Access Rule, (also known as SEC Rule 15c3-5), was established by the Securities and Exchange Commission (SEC) to enhance the integrity and stability of the financial markets by imposing stringent requirements on broker-dealers that provide market access to customers. This rule mandates that these firms implement robust risk management controls and supervisory procedures to prevent excessive risks, such as unauthorized trading and other potential market disruptions. Specifically, broker-dealers must establish pre-trade risk controls to assess the financial viability and trading limits of their customers before allowing access to the markets. The goal of the Market Access Rule is to protect investors and maintain orderly trading by ensuring that firms take proactive measures to mitigate potential risks associated with their clients’ trading activities.