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At Deadline

TickLab to SEC: Create

$100M Audit Trail

A group of U.S.-based companies calling itself TickLab Partners has told the Securities and Exchange Commission that it can create "a fully functional, consolidated audit trail" of capital markets activity for less than $100 million upfront and $100 million a year.

The group, which includes Noetic Partners of New York, XtremeData of Schaumburg, Ill., and Activ Financial Systems of Chicago, said its answer to the SEC's search for an audit trail could be implemented in months, not years. In May, the SEC said it could take years to develop a consolidated audit trail and estimated the upfront cost at $4 billion and the annual cost at $2.1 billion. The cost estimate was assailed at the Securities Industry and Financial Markets Association Technology Expo in June as "a waste." Noetic Partners is a firm specializing in information architecture. Its Noetick Advanced Market Data Analytics Environment provides users with unconstrained access to what it says is a complete set of near real-time tick history. The environment runs on market data delivered by Activ Financial's ActivFeed service and runs on XtremeData's DBx fully integrated database analytics platform.

In its letter to the SEC, the group said "a system that would provide the necessary consolidated audit trail must include":

* Complete, timely and accurate data from all exchanges, trading places and market participants in standard industry formats,

* Current and historical data about trades and quotes;

* At-a-glance presentation of what is real and true at any given moment in time.

FINRA Slaps Morgan With $800,000 Fine

Morgan Stanley & Co. has been fined $800,000 by FINRA for failing to make public disclosures required by the agency's rules governing research analyst conflicts of interest. According to FINRA, the company allegedly failed to comply with certain provisions of the 2003 Research Analyst Settlement by refusing to disclose the availability of independent research in customer account statements.

In a statement issued to On Wall Street, Morgan claims to have initially reported the issue at hand to FINRA and has developed and implemented improved systems for the publication of the required disclosures in order to address the issue at hand.

The regulator found that from April 2006 to June 2010, Morgan distributed equity research reports that failed to provide information regarding the relationship of the company and its analysts to the companies mentioned in its research reports. Together, these discrepancies resulted in about 6,836 deficient disclosures in 6,632 equity research reports and 84 public appearances by research analysts.MME

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Quote of the Week

“It’s pretty clear that economic gravity is setting in.”

- Talley Leger

Portfolio Strategist, Barclays Capital