SEC Charges Trade Matching Provider with Violating Clearing Agency Registration Requirements by Failing to Comply with Commission Exemptive Order
Sept. 27, 2019
File No. 3-19542
September 27, 2019 - The Securities and Exchange Commission today announced settled charges against Omgeo Matching Services US, LLC (n/k/a DTCC ITP Matching (US) LLC) for failing to comply with five of the nine operational conditions set forth in a Commission order exempting it from registration as a clearing agency.
According to the SEC's order, Omgeo Matching's predecessor submitted an application in 2001 to the Commission to provide services to match trade information submitted by broker-dealers with the trade information submitted by institutional customers. The Commission issued an order exempting Omgeo Matching's predecessor from registration as a clearing agency, subject to nine operational conditions that were designed to enable the Commission to monitor the company's risk management procedures, operational safeguards, and corporate structure. The order finds that Omgeo Matching lacked comprehensive policies and procedures to specifically address and ensure oversight of compliance with the exemptive order operational conditions. As a result, the order finds, between October 2013 and March 2017, Omgeo Matching failed to provide the Commission with annual reports prepared by competent independent audit personnel, provide notice of material changes to a services agreement with its parent companies, properly preserve records of customer complaints, provide twenty business days' notice of material changes to its matching services, and respond fully to Commission requests for information.
The SEC's order finds that Omgeo Matching violated the clearing agency registration provision of Section 17A of the Securities Exchange Act of 1934. Without admitting or denying the findings, Omgeo Matching consented to the order, agreeing to cease and desist from further violations and to pay a $2 million penalty.
The investigation was conducted by Aleah Borghard and Sandeep Satwalekar of the Enforcement Division and was supervised by Lara Shalov Mehraban. The Chicago Regional Office, with the assistance of the Office of Clearance and Settlement's National Examination Program, conducted the examinations that led to the investigation. The examination team included Daniel R. Gregus, Matthew McGarvey, Allison Fakhoury, Amy Walstad, Angelica Daughaday, Donald Bernhardt, Raffaele Maione, Karl Nalepa, and Paula Sherman, with the assistance of Claire Noakes from the Division of Trading and Markets.