NYSE ARCA, INC.

NYSE REGULATION,

Complainant, FINRA Proceeding No. 20150457981-01

v.

GTS SECURITIES LLC, October 25, 2017

Respondent.

Respondent violated (i) NYSE Arca Equities Rule 7.33 by entering orders into the NYSE Arca Marketplace that failed to indicate that it was acting in a principal capacity for the orders; and (ii) NYSE Arca Equities Rule 6.18 by failing to establish and maintain a supervisory system that was reasonably designed to achieve compliance with NYSE Arca Equities Rule 7.33, and applicable securities laws and regulations, regarding the submission of accurate capacity codes. Consent to censure and a $9,000 fine.

Appearances

For the Complainant: Shawn R. Mallon, Esq., Kenneth R. Bozza, Esq., and Robert A. Marchman, Esq., FINRA Department ofEnforcement. 1

For the Respondent: Ari M. Rubenstein and Patrick J. Romanello for GTS Securities LLC.

DECISION

GTS Securities LLC ("GTS Securities" or the "Firm") and NYSE Arca, Inc. entered into an Offer of Settlement and Consent for the sole purpose of settling this disciplinary proceeding, without adjudication of any issues of law or fact, and without admitting or denying any

1 On July 27, 2017, the Legal Section ofFINRA's Department of Market Regulation became part of the Department of Enforcement.

allegations or findings referred to in the offer of settlement. 2 The Hearing Officer accepts the Offer of Settlement and Consent and issues this Decision in accordance with NYSE Arca Rules. 3

FINDINGS OF FACTS AND VIOLATIONS

Background and Jurisdiction

1. GTS Securities has been registered as an Equities Trading Permit ("ETP") Holder with NYSE Arca, Inc. (the "Exchange") since October 9, 2014, and with the Financial Industry Regulatory Authority ("FINRA") since April 23, 2014, and its registrations remain in effect. The Firm does not have a relevant disciplinary history.

2. By letter dated October 21, 2016, which GTS Securities received, FINRA, on behalf of the Exchange, notified the Firm of its investigation of this matter.

Overview

3. In connection with this matter, the Trade Reporting Team of FINRA's Department of Market Regulation (the "staff') reviewed the Firm's compliance in connection with inputting the correct capacity with respect to orders entered on the Exchange, as well as on several equity exchanges and the FINRA/Nasdaq Trade Reporting Facility ("FNTRF"), during the period between July 15, 2015, and May 12, 2016 (the "Review Period").

4. Capacity codes are important because, among other things, their inaccuracy could impact certain cross-market surveillances.

5. Based on its review, the staff found that the GTS Securities failed to comply with order marking requirements as set forth in NYSE Arca Equities Rule 7.33 and related supervision rules during the Review Period.

Violations

6. During the Review Period, NYSE Arca Equities Rule 7.33 required that ETP Holders input accurate information into the Exchange, including, but not limited to, whether the ETP Holder was acting in a principal, agency, or riskless principal capacity for each order entered.

7. During the Review Period, NYSE Arca Equities Rule 6.18(a) required, among other things, that every ETP Holder supervise persons associated with it to ensure compliance

2 FINRA' s Office of Hearing Officers reviewed the Offer of Settlement and Consent under the terms of a Regulatory Services Agreement (as amended) among NYSE Group, Inc., New York Stock Exchange LLC, NYSE Arca, Inc., NYSE American LLC, and FINRA.

3 The facts, allegations, and conclusions contained in this Decision were taken from the executed Offer of Settlement and Consent. Prior to August 17, 2017, the rules involved in this matter were called NYSE Arca Equities rules.

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with federal securities laws and the Constitution or the Rules of the Exchange. NYSE Arca Equities Rule 6. l 8(b) required each ETP Holder to "establish and maintain a system to supervise the activities of its associated persons and the operation of its business[,]" and that such system "must be reasonably designed to ensure compliance with applicable federal securities laws and regulations and NYSE Arca Equities Rules." Moreover, NYSE Arca Equities Rule 6.18( c) required each ETP Holder to "establish, maintain, and enforce written procedures to supervise the business in which it engages and to supervise the activities of its associated persons that are reasonably designed to achieve compliance with applicable federal securities laws and regulations, and with the NYSE Arca Equities Rules."

8. During the Review Period, as a result of a coding error, GTS Securities submitted inaccurate information to the Exchange, as well as to multiple equity exchanges and the FNTRF, by entering "Principal" orders as "Agency" orders in a total of approximately 22 million instances, of which approximately 2,546,555 orders were entered on the Exchange from the beginning of the Review Period through August 21, 2015.4 The conduct described in this paragraph constitutes separate and distinct violations of NYSE Arca Equities Rule 7.33.

9. During the Review Period, GTS Securities failed to establish and maintain a supervisory system reasonably designed to achieve compliance with certain applicable securities laws and regulations, and Exchange rules, with respect to submission of accurate capacity codes on orders submitted to the Exchange. In addition, the Firm's supervisory system did not include sufficient written supervisory procedures ("WSPs") to ensure submission of accurate capacity codes. Specifically, the Firm' s supervisory system did not include WSPs that provided for: (i) the identification of the person(s) responsible for supervision with respect to the applicable rules; (ii) a statement of the supervisory step(s) to be taken by the identified person(s); (iii) a statement as to how often such person(s) should take such step(s); and (iv) a statement as to how the completion of the step(s) included in the written supervisory procedures should be documented. The foregoing conduct constitutes a violation of NYSE Arca Equities Rule 6.18.

Other Factors

10. In determining to resolve this matter on the basis set forth herein, the Exchange took into consideration the following: (i) the Firm self-reported a significant number of the capacity code violations; (ii) the Firm provided substantial assistance to Market Regulation staff, including providing the staff with data quantifying the number of violations; and (iii) the subsequent remedial measures implemented by the Firm.

4 These inaccuracies impacted certain cross-market surveillances, but there was no identified market impact or harm to market participants.

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ORDER

GTS Securities LLC violated (i) NYSE Arca Equities Rule 7.33 by entering orders into the NYSE Arca Marketplace that failed to indicate that it was acting in a principal capacity for the orders; and (ii) NYSE Arca Equities Rule 6.18 by failing to establish and maintain a supervisory system that was reasonably designed to achieve compliance with NYSE Arca Equities Rule 7.33, and applicable securities laws and regulations, regarding the submission of accurate capacity codes.

SANCTIONS

GTS Securities LLC is censured and fined $9,000.5

These sanctions are effective immediately.

Kenneth B. Winer Hearing Officer

5 Under the Offer of Settlement and Consent, the Firm agreed to pay a total fine of$75,000, of which $9,000 shall be paid to NYSE Arca, Inc., and the remaining amount shall be paid to Bats BZX Exchange, Inc., Bats BYX Exchange, Inc., The NASDAQ Stock Market LLC, the New York Stock Exchange LLC, and FINRA in accordance with the terms of parallel settlement agreements in related matters between the Firm and each of these SROs.

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