SEC Compliance

Global Securities Pricing Service to Pay $8 Million for Compliance Failures

The Securities and Exchange Commission today charged ICE Data Pricing & Reference Data LLC, a global securities pricing service and New York-based registered investment adviser, for compliance deficiencies relating to its delivery to clients of prices based on quotes it received from a single market participant, also known as single broker quotes.  ICE Data PRD has agreed to pay $8 million to settle the charges. 

According to the SEC’s order, 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.  The order further finds that the company’s quality controls for prices based on single broker quotes were not effectively or consistently implemented. 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.”

The order finds that ICE Data PRD failed to adopt and implement written policies and procedures reasonably designed to prevent violations of the Investment Advisers Act and its rules. 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.

The SEC’s investigation was conducted by Gregory Smolar of the Complex Financial Instruments Unit and Emily Rothblatt, Michelle Muñoz Durk, and Craig McShane of the Chicago Regional Office under the supervision of Jeffrey Shank.