The North American Securities Dealers announced today that it has fined State Street Global Markets LLC of Boston, US$1.4 million for violations relating to the reporting of corporate and municipal bond trades.

State Street Global was cited for failing to report thousands of corporate bond trades to NASD’s Trade Reporting and Compliance Engine and hundreds of municipal bond trades to the Municipal Securities Rulemaking Board over a 17-month period. NASD also cited State Street Global for supervisory deficiencies relating to corporate and municipal bond trade reporting.

The US$1.4 million sanction represents the largest fine imposed to date by NASD against a single firm for fixed income trade reporting violations. State Street Global neither admitted nor denied the charges, but consented to the entry of the NASD’s findings.

“Investors and dealers in municipal and corporate bonds rely upon TRACE and MSRB trade reporting to provide much-needed price transparency in these markets,” said NASD vice chairman Mary Schapiro. “State Street Global’s reporting failures deprived the markets, investors and regulators of critical information, and impaired the integrity of bond trading data that market participants rely upon to make informed investment decisions.”

Since July 2002, brokerage firms have been required to report price and volume data on all corporate bond transactions to TRACE, initially within 75 minutes, and today within 15 minutes. NASD publicly disseminates that transaction data immediately on virtually 100% of over-the-counter corporate bond activity – approximately 22,000 transactions and US$18 billion in volume every day.