Broker fined for unauthorized access violations

Brokerage firm Marex Capital Markets Inc. is being sanctioned for breaching rules of the Bourse de Montréal Inc. (MX) by failing to guard against unauthorized access to the exchange’s trading system.

The regulatory division of the Bourse reached a settlement with the firm that includes a fine of $113,000 and requires it to pay $8,000 in costs to settle allegations that it breached the MX’s rules.

The division filed a complaint against the firm alleging that between May 2019 and December 2023, it breached certain rules by providing nine of its employees with access to the exchange’s trading system without prior approval.

It also alleged that between 2015 and 2023, the firm didn’t have compliance systems in place to ensure that only approved personnel had access to the exchange, and that it failed to notify the exchange of the unauthorized access.

The MX’s disciplinary committee approved the proposed settlement following a hearing in November.

Alongside the fine, the settlement noted that the firm has updated its compliance systems to better guard against unauthorized access.

This effort to remediate the issue was cited as a mitigating factor by the committee, along with the fact that the firm has no disciplinary record, didn’t attempt to conceal its violations, and that the misconduct wasn’t intentional.

That said, the committee stressed that protecting access to the Bourse’s trading systems is a fundamental gatekeeper responsibility, and represents a cornerstone of protecting market integrity.

James Langton

James is a senior reporter for Advisor.ca and its sister publication, Investment Executive. He has been reporting on regulation, securities law, industry news and more since 1994.