SEC Fines Global Securities Pricing Service with $8 Million for Compliance Failures

Specifically, from at least 2015 through September 2020, ICE Data PRD delivered to its clients prices based on single broker quotes while failing to adopt and implement policies and procedures reasonably designed to address the risk that these prices would not reasonably reflect the value of the securities.

Further, the regulator finds that the company's quality controls for prices based on single broker quotes were not effectively or consistently implemented.

According to the regulator, these failures impaired ICE Data PRD's ability to assess the reliability of quotes it received from market participants and determine whether a quote provider was an accurate source of information. This conduct affected the prices ICE Data PRD provided for more than 40,000 fixed-income securities. The SEC's order finds that, due to these failures, ICE Data PRD at times provided clients with prices based on single broker quotes that were inconsistent with the nature of, and that did not reasonably reflect the value of, certain securities.  

“Information provided by pricing services can play an important role in the valuation of complex fixed-income securities by many types of market participants,” said Daniel Michael, Chief of the SEC Enforcement Division's Complex Financial Instruments Unit. “ICE Data Pricing & Reference Data's compliance failures created a risk of, and in some cases resulted in, its delivery to clients of inaccurate prices.”

Without admitting or denying the findings, ICE Data PRD agreed to cease and desist from future violations of the charged provision, to a censure, and to pay an $8 million penalty.