SEC Notice on Texas Stock Exchange Minor Rule Violation Plan
AI-generated summary for informational purposes only. Not legal advice. See the original source for the authoritative text.
This notice would let the Texas Stock Exchange handle certain low-level rule breaches with fines of up to $2,500 instead of opening a full disciplinary case. The plan would cover issues such as late trading data responses, short-sale marking errors, locked or crossed market rule breaches, public communications issues, limit order display failures, market maker quoting failures, and Consolidated Audit Trail compliance failures. Members, employees, and associated persons of Texas Stock Exchange members could receive written fine notices. Paying the fine waives the right to contest the matter through the exchange’s disciplinary process. A person who wants to fight the fine must respond in writing by the stated deadline, which must be at least 15 business days after service. The SEC is taking public comments until May 22, 2026, and may approve, limit, or add conditions to the plan after that date.
AI-generated summary. May contain errors. Refer to official sources for legal decisions.
Key Changes
- Creates a proposed process for Texas Stock Exchange to fine minor rule violations up to $2,500 without starting a full disciplinary case.
- Lists the rule areas eligible for minor treatment, including trading data responses, short-sale marking, limit order display, market maker quoting, and CAT compliance.
- Requires quarterly reporting to the SEC for minor violations handled under the plan instead of immediate reporting of each case.
Obligations
What this law requires
After the MRVP is declared effective, TXSE must submit a quarterly report to the SEC for any minor rule violation actions taken under the plan, including the internal file number, individual or organization name, nature of the violation, specific rule provision violated, fine imposed, number of occurrences, and disposition date.
For any minor rule violation fine imposed under TXSE Rule 8.015, TXSE must serve the fined person with a written statement signed by an authorized Exchange officer identifying the rule allegedly violated, the act or omission constituting each violation, the fine imposed for each violation, and the date the determination becomes final and the fine becomes due.
TXSE may impose minor rule violation fines only up to $2,500 per sanctioned Member, associated person, or registered or non-registered employee of a Member under the MRVP.
A person fined under TXSE Rule 8.015 who wants to contest the finding must file a written response with TXSE meeting TXSE Rule 8.005 requirements by the contest deadline stated in the notice; that deadline must be at least 15 business days after service of the written statement.
TXSE Members and covered associated or employee persons must submit responses to TXSE requests for trading data within the time periods specified by TXSE Rule 4.002 and related interpretations and policies.