ComplySci adds exclusive direct broker feed from Apex Clearing

Apex Clearing Corporation, a Peak 6 company, has signed an exclusive agreement to provide ComplySci clients with direct broker connectivity to the Apex trading platform.

ComplySci is a provider of regulatory technology and compliance for the financial services sector and has now added Apex Clearing to its direct broker feed count that expands its robust employee trade monitoring offerings.

ComplySci currently provides access to more than 225 direct feeds from trading platforms.

Access to data for a successful compliance program

Amy Kadomatsu, Chief Executive Officer at ComplySci, commented: “We are incredibly excited to have an exclusive partnership with Apex. This is just one more way in which we are working to ensure our customers never miss a thing by having access to the data they need most to lead a successful compliance program. Direct feeds allow firms to greatly decrease or even completely do away with the need for manual data entry, which reduces the risk associated with human error, non-reporting and other such challenges.”

“Our goal at the end of the day is to provide our customers with an all-encompassing, scalable compliance solution that can fit their needs now and grow with them in the future. It’s one of the reasons we have chosen to invest more time and development upfront to set up direct feeds on behalf of our clients, rather than relying on a third party who may not view their data as mission critical. The burden continues to grow for firms to track, monitor and report on compliance-related regulations, which is why it is crucial compliance leaders be able to trust their data and its accuracy.”

Direct feeds provide the most reliable, accurate and secure way for firms to collect and review employee trading information. These feeds send brokerage account data files directly to a compliance system through a secure connection, allowing compliance teams more control to track, detect and report on employee trading.

ComplySci caters to more than 7,000 customers, including some of the world’s largest financial institutions.

Past reporting issues at Apex Clearing

In 2019, Apex Clearing agreed to pay a fine of $140,000 as a part of a settlement with the United States Financial Industry Regulatory Authority (FINRA) over failures to comply with the regulator’s short interest reporting requirements and related supervision obligations, between June 2012 and April 2016.

During the review period, Apex experienced an issue in its short interest reporting logic that excluded certain short interest positions from the firm’s submissions to FINRA.

Apex instructed its correspondent broker-dealer customers to book short positions into either the Type 1 (cash) or Type 5 (short margin) accounts. Without Apex’s knowledge, certain correspondent broker-dealers were booking short positions into another account available to them – Type 2 (margin) account. The short positions booked into this account were not included in the firm’s submissions to FINRA.

FINRA also found that Apex failed to establish and maintain a supervisory system, including written supervisory procedures, to confirm that its reporting system captured all reportable short interest positions.