SEC Censures OTC Link LLC for Repeated Compliance Failures Related to Regulation SCI

On August 21, 2023, the Securities and Exchange Commission (SEC) reprimanded New York-based broker dealer OTC Link LLC for repeated non-compliance with Regulation Systems Compliance and Integrity (SCI). OTC Link LLC, which operates the OTC Link Alternative Trading System (ATS), was ordered to pay a $575,000 civil penalty for failing to establish, maintain, and enforce certain written policies and procedures required by SCI.

The SEC discovered that OTC Link LLC had not established policies and procedures related to system security, access control, application vulnerability management, testing, and remediation between August 2016 and March 2025. Despite the SEC examining OTC Link ATS multiple times during this period, the firm consistently failed to remediate deficiencies in a timely manner.

This disregard for the SEC's findings and the examination process led to the imposition of a meaningful penalty, according to Laura D’Allaird, Chief of the Division of Enforcement's Cyber and Emerging Technologies Unit.

The SEC's order indicates that OTC Link LLC did not have written policies and procedures that were adequate to ensure the capacity, integrity, resiliency, availability, and security of its SCI systems, including OTC Link ATS and indirect SCI systems. Consequently, the firm violated Rules 1001(a)(1), (a)(2), and (a)(3) of Regulation SCI. Although OTC Link LLC did not admit to the findings, it agreed to a cease-and-desist order, a censure, and a $575,000 civil penalty.