The Financial Industry Regulatory Authority (FINRA) has fined RBC Capital Markets for failing to comply with trade confirmation regulations. As part of a settlement, the firm agreed to pay $375,000, acknowledging its shortcomings in providing accurate and timely trade confirmations to customers.

RBC Capital Markets Fined $375K for Trade Confirmation Violations

According to the settlement, between 2010 and 2019, RBC Capital Markets sent approximately 940,000 trade confirmations to customers containing inaccurate information. These confirmations incorrectly stated the execution capacity (agency or principal) and whether the transactions were solicited or unsolicited.

Furthermore, the firm allegedly failed to deliver millions of trade confirmations to customers who had requested electronic delivery or participated in dividend reinvestment programs. This oversight spanned from 2006 to 2023, affecting at least 285,000 accounts.

“During the relevant period, RBC failed to establish, maintain, and enforce a supervisory system, including written supervisory procedures, reasonably designed to achieve compliance with trade confirmation requirements,” FINRA stated.

FINRA's investigation revealed that RBC Capital Markets lacked an adequate supervisory system and written procedures to ensure compliance with trade confirmation requirements. The firm failed to conduct periodic monitoring and testing to identify issues with its internal systems and third-party vendors responsible for generating and sending trade confirmations.

This is not the only fine RBC Capital Markets has paid in recent years in the United States. In 2022, the Cboe Exchange took disciplinary actions against the company for an alleged rules violation regarding anticipatory hedging. As a result, they agreed to pay $90,000.

Restitution and Remediation

As part of the settlement , RBC Capital Markets agreed to pay affected customers a fine and restitution totaling $393,833.50. Additionally, the firm must certify within 180 days that it has remediated the trade confirmation issues and implemented a robust supervisory system to prevent similar violations in the future.

Trade confirmations are crucial in protecting investors by providing transparency and enabling them to verify transaction details and evaluate execution quality. FINRA's action against RBC Capital Markets underscores the importance of accurate and timely trade confirmations and highlights the regulator's commitment to ensuring firms comply with these essential requirements.

Earlier this month, FINRA censured H2C Securities Inc. and imposed a $250,000 fine for not preserving and reviewing more than 1.25 million business-related electronic communications. These communications, which date from January 2013 to June 2021, were sent or received by associated persons of H2C Securities using four platforms provided by the firm.

In a separate action, FINRA levied an $850,000 fine against M1 Finance. The fine was due to the fintech firm’s inadequate oversight of social media influencers used in its marketing campaign for brokerage accounts.