NYSE ARCA, INC. Appearances

Transcription

1 NYSE ARCA, INC. NYSE REGULATION, v. MORGAN STANLEY & CO. LLC, Complainant, Proceeding No August 23, 2018 Respondent. Morgan Stanley & Co. LLC violated: (i) SEA Rules 15c3-5(b) and (c)(1)(ii), and NYSE Arca Equities Rules 6.18 and 2010, by failing to establish, document, and maintain a system of risk management controls and supervisory procedures, including written supervisory procedures and an adequate system of follow-up and review, reasonably designed to manage the financial, regulatory, and other risks of its market access business; (ii) SEA Rules 15c3-5(b) and (c)(2), and NYSE Arca Equities Rules 6.18 and 2010, by failing to establish, document, and maintain a system of risk management controls and supervisory procedures, including written supervisory procedures and an adequate system of follow-up and review, reasonably designed to manage the financial, regulatory, and other risks of its market access business to ensure compliance with all regulatory requirements; and (iii) SEA Rules 15c3-5(b) and (e)(1), and NYSE Arca Equities Rules 6.18 and 2010, by failing to establish, document, and maintain a reasonably designed system for regularly reviewing the effectiveness of the risk management controls and supervisory procedures for messaging activity required by paragraphs (b) and (c) of SEA Rule 15c3-5, to assure the overall effectiveness of the Firm s risk management controls and supervisory procedure. Consent to censure, $200,000 fine, and undertaking. Appearances For the Complainant: Jacqueline Gorham, Esq., Kenneth R. Bozza, Esq., Tina S. Gubb, Esq. and Elizabeth Hogan, Esq., FINRA Department of Enforcement. For the Respondent: Wayne M. Aaron, Esq., Milbank, Tweed, Hadley & McCloy LLP. 1 Includes Matter Nos , , , and

2 DECISION Morgan Stanley & Co. LLC ( Morgan Stanley or 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 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. Morgan Stanley, a wholly-owned subsidiary of Morgan Stanley Domestic Holdings, Inc., is a Delaware limited liability company headquartered in New York, New York. The Firm provides services to corporate and broker-dealer clients and institutional investors, and acts as an agency broker-dealer, providing market access and execution services to market participants ( Market Access Clients ) for a wide variety of products. 2. Morgan Stanley has been registered as an Equities Trading Permit ( ETP ) Holder with NYSE Arca, Inc. ( NYSE Arca or Exchange ) since July 29, 1974, and with FINRA since June 5, Its registrations remain in effect. The Firm does not have a relevant disciplinary history. 3. Several Jurisdiction Letters were sent to Morgan Stanley from August 18, 2014, through April 20, 2016, notifying it of the investigations referenced herein conducted by the Department of Market Regulation ( Market Regulation ) of the Financial Industry Regulatory Authority ( FINRA ). Overview 4. In Matter No , the Chicago Equities Section of Market Regulation reviewed Clearly Erroneous Execution ( CEE ) petitions filed on the Exchange between September 4, 2012, and November 1, 2012, and Morgan Stanley s risk management controls and supervisory procedures for compliance with Rule 15c3-5 of the Securities Exchange Act of 1934 ( SEA ) ( Market Access Rule ). 4 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 MKT 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. 4 The SEC adopted Rule 15c3-5 effective July 14, See 17 C.F.R c3-5, Risk Management Controls for Brokers or Dealers with Market Access, 75 Fed. Reg (Nov. 15, 2010) (Final Rule Release). 2

3 5. In Matter No , the Chicago Equities Section of Market Regulation reviewed a CEE petition filed on May 20, 2015, and Morgan Stanley s compliance with the Market Access Rule. 6. In Matter No , the Market Analysis Section of Market Regulation reviewed Morgan Stanley s voluntary request to bust (i.e., a request to cancel) a trade on the Exchange on November 3, 2015, which was denied, and the Firm s compliance with the Market Access Rule. 7. In Matter No , the ETP Surveillance and Investigations Group of the Quality of Markets Section of Market Regulation reviewed Morgan Stanley s written supervisory procedures ( WSPs ) regarding the process for overriding a Market Access Client s breach of its assigned messaging controls and related post-trade review process during the period of April 2014, and the Firm s compliance with the Market Access Rule. 8. In Matter No , the Trading Analysis Section of Market Regulation reviewed potentially violative or manipulative trading activity executed through Morgan Stanley and occurring on the Exchange between October 2012 and November 2013, and the Firm s compliance with the Market Access Rule. 9. In Matter No , the ETP Surveillance and Investigations Group of the Quality of Markets Section of Market Regulation reviewed potentially violative or manipulative trading activity that occurred on the Exchange between March 31, 2014, and September 30, 2015, and Morgan Stanley s compliance with the Market Access Rule. 10. The above matters were part of investigations Market Regulation conducted on behalf of the Exchange and other self-regulatory organizations, including Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., FINRA, Miami International Securities Exchange, LLC, The NASDAQ Stock Market LLC, and New York Stock Exchange, Inc. (collectively, the SROs ), to review the Firm s compliance with the Market Access Rule and the supervisory rules of the relevant SROs, including NYSE Arca Equities Rules 6.18 and 2010, from July 14, 2011, through July 2017 ( Review Period ). 11. Market Regulation s investigations determined that, during the Review Period, Morgan Stanley failed to establish, document, and maintain a system of risk management controls and supervisory procedures, including WSPs and an adequate system of follow-up and review, reasonably designed to manage the financial, regulatory, and other risks of its market access business. 12. Specifically, during the Review Period, Morgan Stanley failed to establish, document, and maintain a system of risk management controls and supervisory procedures reasonably designed to prevent the entry of erroneous orders by rejecting orders that 3

4 exceed appropriate price or size parameters, or that indicate duplicative orders, in violation of SEA Rules 15c3-5(b) and (c)(1)(ii), and NYSE Arca Equities Rules 6.18 and Further, during the Review Period, Morgan Stanley failed to assure the overall effectiveness of its risk management controls and supervisory procedures, in violation of SEA Rule 15c3-5(e)(1), and NYSE Arca Equities Rules 6.18 and Finally, during the Review Period, Morgan Stanley failed to establish, document, and maintain a system of risk management controls and supervisory procedures reasonably designed to ensure compliance with all regulatory requirements, 5 including supervising customer trading to detect and prevent potentially violative and manipulative activity, in violation of SEA Rules 15c3-5(b) and (c)(2), and NYSE Arca Equities Rules 6.18 and Applicable Rules Violations 15. During the Review Period, SEA Rule 15c3-5(b) required broker-dealers that provide market access to establish, document, and maintain a system of risk management controls and supervisory procedures reasonably designed to manage the financial, regulatory, and other risks of their market access business During the Review Period, SEA Rule 15c3-5(c)(1)(i) required market access brokerdealers to have financial risk management controls and supervisory procedures reasonably designed to prevent the entry of orders that exceed appropriate pre-set credit or capital thresholds in the aggregate for each customer and the broker or dealer and, where appropriate, more finely-tuned by sector, security, or otherwise by rejecting orders if such orders would exceed the applicable credit or capital thresholds. 17. During the Review Period, SEA Rule 15c3-5(c)(1)(ii) required market access brokerdealers to have financial risk management controls and supervisory procedures reasonably designed to prevent the entry of erroneous orders, by rejecting orders that exceed appropriate price or size parameters, on an order-by-order basis or over a short period of time, or that indicate duplicative orders. 5 See 75 Fed. Reg. at (noting that regulatory requirements include post-trade obligations to monitor for manipulation and other illegal activity. ). See also FINRA s 2009 Priorities Letter (Mar. 9, 2009) (referencing NASD Notice to Members (Sep. 2004), which specifically noted the need to ensure that orders entered by a firm or its customers via the firm s trading systems are representative of bona fide trading and quote activity). 6 SEA Rule 15c3-5 requires that broker-dealers providing market access must appropriately control the risks associated with market access so as not to jeopardize their own financial condition, that of other market participants, the integrity of trading on the securities markets, and the stability of the financial system. 75 Fed. Reg. at

5 18. During the Review Period, SEA Rule 15c3-5(c)(2) required market access broker-dealers to have regulatory risk management controls and supervisory procedures reasonably designed to ensure compliance with all regulatory requirements. 19. During the Review Period, SEA Rule 15c3-5(e) required a broker or dealer with market access to establish, document and maintain a system for regularly reviewing the effectiveness of its risk management controls and for promptly addressing any issues. SEA Rule 15c3-5(e)(1) required the broker or dealer to review, no less frequently than annually, the business activity of the broker or dealer in connection with market access to assure the overall effectiveness of its risk management controls and supervisory procedures. Moreover, this rule required, among other things, that the review be conducted in accordance with written procedures and be documented. These provisions were intended to ensure that a broker or dealer implements supervisory review mechanisms to support the effectiveness of its risk management controls and supervisory procedures on an ongoing basis SEA Rule 15c3-5 requires, among other things, that a broker-dealer with market access document its system of risk management controls and supervisory procedures designed to manage the financial, regulatory, and other risks of market access. The broker-dealer must preserve a copy of its supervisory procedures and a written description of its risk management controls as part of its books and records for the time period required by SEA Rule 17a-4(e)(7). 8 The required written description is intended, among other things, to assist the Securities and Exchange Commission and SRO staff to assess the brokerdealer s compliance with the rule 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 with federal securities laws and the Constitution or the Rules of the Exchange. NYSE Arca Equities Rule 6.18(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 with the NYSE Arca Equities Rules Fed. Reg. at See 17 C.F.R c3-5(b), which by reference to Rule 17a-4(e)(7), requires a broker-dealer to maintain and preserve such description until three years after the termination of the use of the document. See 17 C.F.R a-4(e)(7) Fed. Reg. at

6 22. During the Review Period, NYSE Arca Equities Rule 2010 provided that ETP Holders, in the conduct of their business, shall observe high standards of commercial honor and just and equitable principles of trade. Overview of Morgan Stanley s Market Access Systems 23. During the Review Period, Morgan Stanley provided and maintained market access and executed millions of trades per day for Market Access Clients. 24. During the Review Period, Morgan Stanley had a number of different divisions that sent orders to various markets. These divisions included the Firm s Institutional Equities Division, which conducted traditional agency and principal business, and offered electronic trading services to its Market Access Clients. 25. During the Review Period, Morgan Stanley used a variety of systems (e.g., order management systems, algorithms, etc.) for its Market Access Clients and traders to enter orders for routing to, and execution on, various U.S. securities markets, including the SROs. Those systems contained controls to which the orders submitted were subjected. In addition, Morgan Stanley assigned and applied various controls to individual Market Access Clients and traders to which orders submitted by those clients and traders were subjected before submission to the various markets. 26. Morgan Stanley generally implemented one or more of the following pre-trade controls: a duplicate order control; a single order notional control (i.e., the value of an order, which is generally calculated by multiplying the share price by the amount of shares); a single order quantity control; a liquidity control (i.e., a percentage of the estimated daily volume in a symbol); or, an average daily trading volume ( ADTV ) control. The combination of controls and the limits at which these controls were set varied depending upon the Market Access Client or Firm trader. Moreover, the Firm monitored its Market Access Clients and traders orders on a post-trade basis for compliance with regulatory requirements, including among other things, potentially manipulative activity. Inadequate Pre-Trade Erroneous Order Controls 27. Despite the various pre-trade controls in place during the Review Period that were designed to prevent the entry of erroneous orders, Morgan Stanley failed to implement reasonably designed pre-trade risk management controls applicable to orders submitted by certain Market Access Clients in certain circumstances, and failed to establish and implement supervisory procedures reasonably designed to prevent the entry of potentially erroneous orders during the Review Period, as set forth below. 28. Because Morgan Stanley s pre-trade controls were not reasonably designed as applied to certain of the Firm s Market Access Clients, the Firm did not prevent the transmission of certain erroneous equity and options orders to the SROs or to the Exchange, causing 54 erroneous order events (53 for equities and one for options) resulting in one trading halt 6

7 and one request for a voluntary bust. The erroneous equity order events caused price movement in the related securities, including movement of up to 77% in one instance. 29. There were several primary deficiencies in Morgan Stanley s pre-trade price and size controls that resulted in the submission of the orders that caused these erroneous order events. In some instances, the Firm did not include controls that took into account the individual characteristics of a security, such as the ADTV of a security. When it did implement an ADTV or a comparable control that took into account the individual characteristics of a security, the limits in certain circumstances were generally set too high to effectively identify and prevent potentially erroneous orders, absent additional reasonable controls. For example, certain of the Firm s Market Access Client specific controls during the Review Period employed liquidity limits that permitted single orders of up to a certain percentage of a symbol s predicted daily trading volume. In certain circumstances, the Firm s assigned limits combined with its estimated predicted daily trading volume would have allowed a client to enter single orders of up to several multiples of a symbol s ADTV, which was inadequate without additional reasonable controls. 30. Moreover, between June 26, 2012, and December 12, 2012, there was an error in the Firm s order entry logic causing its liquidity check to fail to apply to aggressive (versus passive) orders. 10 The liquidity check determined if an order was aggressive or passive, and then apply only to aggressive orders by comparing the size of aggressively-priced orders against historic or predicted market trading volume of the subject security. If the ratio between the order quantity and the applicable volume calculation exceeded the preset percentage, the order was flagged for review. The Firm intended the passive versus aggressive determination feature to be turned off for market orders, thereby causing all market orders to be treated as aggressive orders and subjected to a liquidity check, but it was inadvertently left on for a limited category of market orders. Thus, some market orders were determined to be passive orders and not subjected to a liquidity check. 31. Further, in at least one other circumstance where Morgan Stanley employed liquidity limits, it required another parameter to be breached to generate an alert and was therefore not effective to identify and prevent potentially erroneous orders, absent additional reasonable controls. For example, for at least one Market Access Client, the Firm s pretrade order controls were not reasonably designed to prevent potentially erroneous orders in lower priced securities without additional controls due to the requirement that both the liquidity control and the notional control to be breached for orders under a fixed amount of shares before the order would be flagged as potentially erroneous. 10 An aggressive order is an order that seeks to remove liquidity, whereas a passive order provides liquidity. For example, an aggressive buy order is generally priced on the offer or higher, and an aggressive sell order is priced on the bid or lower. 7

8 32. In addition, some Morgan Stanley Market Access Clients were assigned a price away control that applied to limit orders preventing the entry of an order if it was priced a predetermined percentage away from the national best bid or offer ( NBBO ) for the subject security. In certain circumstances, the threshold the Firm applied was too high to prevent the entry of potentially erroneous orders without additional reasonable controls Further, in certain circumstances, Morgan Stanley s pricing control assigned limit prices equivalent to the Limit Up/Limit Down ( LULD ) bands, 12 which did not reasonably prevent the entry of potentially erroneous orders without additional reasonable controls. For example, in certain circumstances the Firm routed short sale orders to an exchange at prices equivalent to the lower end of the LULD band, resulting in 40 orders to that exchange priced between approximately 17% and 41% through the National Best Bid. 34. On November 3, 2015, Morgan Stanley s size, price and liquidity limit controls did not prevent the entry of an order, totaling 25,554 shares, on the Exchange in ABC 13 security mistakenly entered by Market Access Client ( CD ) 14 as a market order, rather than a limit order as the client of CD had intended. Because the controls applicable to CD s market orders that took into account the individual characteristics of a security were set too high to be effective without additional reasonable controls, CD s order received 113 executions totaling approximately 25,554 shares, representing over 35% of ABC s ADTV, at prices up to approximately 20% away from the previous NBBO in ABC. Morgan Stanley, on behalf of CD, requested a voluntary bust of these executions on the Exchange, which was declined. 35. The acts, practices, and conduct described above in paragraphs 27 through 34 constitute violations of SEA Rules 15c3-5(b) and (c)(1)(ii), and NYSE Arca Equities Rules 6.18 and Inadequate Procedures Regarding Messaging Controls 36. During the Review Period, Morgan Stanley failed to have WSPs governing the investigation of messaging alerts, and failed to conduct a post-trade review process in the event a pre-trade messaging control was breached. Further, the Firm failed to give written guidance to its personnel regarding the proper handling of messaging alerts and failed to 11 In situations where the NBBO may not be indicative of the true market, such as for illiquid securities where the NBBO spread can often be particularly wide, rather than use a pre-determined percentage from the NBBO, one effective practice to prevent potentially erroneous orders is to establish an alternative reference point, such as a control that measures the order price as a percentage away from the last sale. See Report on FINRA Examination Findings, December 2017, p The LULD mechanism is intended to prevent trades in NMS stocks from occurring outside of specified price bands, coupled with trading pauses to accommodate more fundamental price moves. 13 A generic identifier was used in place of the name of this security. 14 A generic identifier was used in place of the name of this client. 8

9 employ a process to ensure its personnel were appropriately resolving any messaging alerts. Thus, the Firm failed to establish, document and maintain a reasonable system for regularly reviewing the effectiveness of its risk management controls and supervisory procedures for messaging activity. 37. Further, Morgan Stanley failed to maintain on its logs a record reflecting how a messaging control alert was resolved and the rationale for the action taken (including the basis for revising a messaging control threshold). Thus, the Firm could not have been reviewing alerts and how Firm personnel handled them. As a result, the Firm cannot adequately demonstrate that it assured the overall effectiveness of its risk management controls and supervisory procedures for messaging activity, as it is required to do no less frequently than annually. Moreover, Morgan Stanley s failures in this regard also prevented the Firm from being able to adequately adjust its messaging controls and procedures to help assure their continued effectiveness and to identify any weaknesses in the Firm s controls or procedures. 38. The acts, practices, and conduct described above in paragraphs 36 and 37 constitute violations of SEA Rules 15c3-5(b) and (e)(1), and NYSE Arca Equities Rules 6.18 and Inadequate Supervision of Customer Trading 39. Although throughout the Review Period Morgan Stanley employed a series of post-trade surveillances and reviews to detect, escalate and ultimately prevent potentially violative or manipulative trading activity, including marking the close activity, certain of these surveillances were unreasonably designed. Further, the Firm failed to have any surveillances and reviews to detect, escalate and ultimately prevent potential layering 15 and spoofing 16 activity until November Thus, in these instances, Morgan Stanley failed to comply with certain regulatory requirements by failing to adequately supervise its Market Access Clients trading to detect potentially violative activity during the Review Period. 40. While Morgan Stanley used a commercial non-proprietary third-party surveillance system during the Review Period that provided five surveillance reports to review for 15 Layering is a form of market manipulation that typically includes placement of multiple limit orders on one side of the market at various price levels that are intended to create the appearance of a change in the levels of supply and demand. In some instances, layering involves placing multiple limit orders at the same or varying prices across multiple exchanges or other trading venues. An order is then executed on the opposite side of the market and most, if not all, of the multiple limit orders are immediately cancelled. The purpose of layering is to induce or trick other market participants to enter orders due to the appearance of interest, thus allowing the trader to receive a more favorable execution on the opposite side of the market. 16 Spoofing is also a manipulative trading tactic designed to induce other market participants into executing trades. Spoofing is a form of market manipulation that generally involves, but is not limited to, the market manipulator placing an order or orders with the intention of cancelling the order or orders once they have triggered some type of market movement and/or response from other market participants, from which the market manipulator might benefit by trading on the opposite side of the market. 9

10 potentially manipulative activity and, beginning in August 2015, used an additional internal report designed to review for potential marking the close activity, the Firm did not capture certain potential marking the close activity on the Exchange that occurred in November In addition, Morgan Stanley reviewed the reports generated by the third-party surveillance system to identify patterns of potentially manipulative activity and considered key dates as a factor when reviewing alerts, but the parameters used in these surveillances did not identify smaller movements on key dates or over multiple dates. Thus, the Firm lacked surveillances to identify patterns of potential marking the close activity and potential marking the close activity on key dates. 42. Moreover, a review of at least one marking the close alert reflected that the analyst who closed the alert failed to consider relevant factors in performing the analysis and, provided conclusory statements in support of the disposition of the alert. Thus, a supervisor reviewing the initial handling of the alert could not have adequately evaluated the analyst s conclusions. 43. Finally, Morgan Stanley failed to implement post-trade surveillance reports to monitor and review customer trading activity to detect, escalate, and ultimately prevent potential layering and spoofing activity until November As a result, the Firm failed to detect numerous instances of potential layering and spoofing activity on certain of the SROs and the Exchange between October 2012 and November For the reasons set forth above, Morgan Stanley failed to adequately supervise and surveil its Market Access Clients trading for potential marking the close activity and potential layering and spoofing activity during the above-referenced periods. 45. The acts, practices, and conduct described above in paragraphs 39 through 44, constitute violations of SEA Rule 15c3-5(b) and (c)(2), and NYSE Arca Equities Rules 6.18 and ORDER Morgan Stanley & Co. LLC violated: (i) SEA Rules 15c3-5(b) and (c)(1)(ii), and NYSE Arca Equities Rules 6.18 and 2010, by failing to establish, document, and maintain a system of risk management controls and supervisory procedures, including WSPs and an adequate system of follow-up and review, reasonably designed to manage the financial, regulatory, and other risks of its market access business, including pre-trade controls to prevent the entry of erroneous orders by rejecting orders that exceed appropriate price or size parameters, or that indicate duplicative orders; (ii) SEA Rules 15c3-5(b) and (c)(2), and NYSE Arca Equities Rules 6.18 and 2010, by failing to establish, document, and maintain a system of risk management controls and supervisory procedures, including WSPs and an adequate system of follow-up and review, reasonably designed to manage the financial, regulatory, and other risks of its market access 10

11 business to ensure compliance with all regulatory requirements, including supervising customer trading to detect and prevent potentially violative activity; and (iii)sea Rules 15c3-5(b) and (e)(1), and NYSE Arca Equities Rules 6.18 and 2010, by failing to establish document, and maintain a reasonably designed system for regularly reviewing the effectiveness of the risk management controls and supervisory procedures for messaging activity required by paragraphs (b) and (c) of SEA Rule 15c3-5, to assure the overall effectiveness of the Firm s risk management controls and supervisory procedures. SANCTIONS Morgan Stanley & Co. LLC is censured and fined $200, Morgan Stanley shall address the Market Access Rule deficiencies described in this Decision and ensure it has implemented controls and procedures reasonably designed to achieve compliance with the rules and regulations cited herein. Within 120 days of the date of this Decision, the Firm shall submit to the Compliance Assistant, Department Of Enforcement, 9509 Key West Avenue, Rockville, MD 20850, a written report, certified by a senior management Firm executive, to MarketRegulationComp@finra.org, providing the following information: (i) a reference to this matter; (ii) a representation that the Firm has addressed each of the deficiencies described above, including the specific measures or enhancements taken to address those deficiencies; and (iii) the date(s) this was completed. The Department of Enforcement may, upon a showing of good cause and in its sole discretion, extend the time for compliance with these provision These sanctions are effective immediately. Matthew Campbell Hearing Officer 17 Under the Offer of Settlement and Consent, Morgan Stanley agreed to pay a total fine of $1,100,000, of which $200,000 shall be paid to NYSE Arca and the remaining amount shall be paid to Cboe BZX Exchange, Inc., Cboe BYX Exchange, Inc., Cboe EDGA Exchange, Inc., Cboe EDGX Exchange, Inc., FINRA, Miami International Securities Exchange, LLC, The NASDAQ Stock Market LLC, and New York Stock Exchange, LLC., in accordance with the terms of parallel settlement agreements in related matters between Morgan Stanley and each of these selfregulatory organizations. 11