Interactive Brokers fined by NYSE Arca for inaccurate reporting

Interactive Brokers, an American multinational brokerage firm, has agreed to a censure and a fine of $237,500 as a part of a settlement with NYSE Arca, a subsidiary of the NYSE Group, Inc.

During the period between January 8, 2015 and November 29, 2019, Interactive Brokers LLC violated NYSE Arca Rule 6.69-O by reporting more than 525,000 option orders with an inaccurate origin code of Customer to the Exchange, rather than the required Professional Customer code. The orders were executed on behalf of 12 Interactive Brokers' customers and comprised nearly 2.1 million contracts.

​Internally, Interactive Brokers created and maintained accurate records that designated the qualifying order flow with the Professional Customer origin code. However, because Interactive Brokers failed to recognize that certain of its order routing connections with the Exchange needed to be reconfigured in order to transmit the Professional Customer code designation for qualifying order flow, the records reported to the Exchange were mismarked.

As a result, Interactive Brokers' internal records correctly reflected the Professional Customer origin code whereas the records reported to NYSE Arca incorrectly designated the order flow. Upon recognizing the error, the firm remediated the issue. Furthermore, the firm has implemented additional supervisory controls and reviews.