The National Futures Association (NFA) has ordered London-based introducing broker Sigma Broking Limited to pay a $150,000 fine for alleged multiple compliance violations, according to an NFA decision issued on May 28.

NFA Fines UK Introducing Broker Sigma Broking $150,000

The decision, handed down by an NFA Hearing Panel, found that Sigma Broking failed to conduct required annual anti-money laundering audits in 2020, 2021 and 2022, keep written pre-trade communications readily accessible, and properly supervise its operations.

The Hearing Panel's decision was based on a complaint issued by NFA's Business Conduct Committee in February and a settlement offer submitted by Sigma Broking, in which the firm neither admitted nor denied the allegations and agreed to pay a fine of $150,000.

“Sigma Broking acknowledged in its offer that any decision accepting the offer would include findings that Sigma Broking committed the violations alleged against in the complaint,” the NFA decisions said. “Further, Sigma Broking conditioned its offer upon the hearing panel expressly acknowledging in any decision accepting the offer that Sigma Broking provided NFA with evidence the firm completed its 2020 and 2023 AML audits.”

As an NFA member, Sigma Broking is required to comply with the self-regulatory organization's rules and regulations. The NFA oversees the US derivatives industry, including futures commission merchants, introducing brokers, swap dealers, and other market participants.

Recent Fines in the Financial Industry

In a similar case a few months ago, the NFA imposed a fine of $140,000 on Braemar Securities, another London-based broker, for alleged failures in meeting communication recordkeeping obligations and improperly disclosing confidential customer information.

Another US regulator, the Financial Industry Regulatory Authority (FINRA), has also been issuing fines to firms in the financial sector. Finance Magnates recently reported on a case in April where FINRA fined RBC Capital Markets for failing to comply with trade confirmation regulations. The firm agreed to pay $375,000 as part of a settlement, acknowledging its shortcomings in providing accurate and timely trade confirmations to customers.

A few weeks prior to the RBC Capital Markets case, FINRA censured H2C Securities Inc. and imposed a fine of $250,000 for failing to preserve and review over 1.25 million business-related electronic communications between January 2013 and June 2021. These communications were sent or received by H2C Securities' associated persons using four platforms made available by the firm.

These cases highlight the importance of compliance with regulatory requirements in the financial industry.