Europe’s revised Markets in Financial Instruments Directive (MiFID II), effective January 3, 2018, makes a number of important regulatory changes concerning the delivery of financial services and products. A number of these changes have an extraterritorial element that can have a significant impact on US firms. A particularly contentious area has been how European Union … Continue Reading
In a decision issued on July 7, 2017, the U.S. Court of Appeals for the D.C. Circuit vacated revisions to the PJM Interconnection, L.L.C. (“PJM”) Minimum Offer Price Rule (“MOPR”) that had been proposed by the Federal Energy Regulatory Commission (“FERC”) in response to a filing submitted by PJM pursuant to section 205 of the … Continue Reading
The staff of the SEC’s Office of Compliance Inspections and Examinations has announced its 2017 examination priorities. In 2017, the SEC will focus on: *Retail Investors—Protecting retail investors from product and service risks, roboadvisers and wrap fee programs *Senior Investors and Retirement Investments—Focusing on variable insurance products, ETFs and target-date funds *Market-Wide Risks—Focusing on compliance … Continue Reading
The SEC voted to publish for comment a proposal to create a single database that would allow regulators to track trading activity in the U.S. equity and options markets, referred to as a consolidated audit trail (“CAT”). The CAT is being created by a joint plan of eighteen national securities exchanges and FINRA (collectively, the self-regulatory … Continue Reading
The CFTC has proposed a set of rules, referred to collectively as proposed Regulation AT, that would, for the first time, impose risk control and other requirements governing algorithmic trading systems (ATSs) in futures contracts, options, and swaps traded on designated contract markets (DCMs) such as CME, CBOT, NYMEX, and ICE Futures US. Regulation AT … Continue Reading
On June 30, 2015, the world will once again experience a “leap second,” where one second is added to the clock. As a result, there will actually be civilian clocks reading 23:59:60 on that day. (Leap second has no impact on atomic clocks and any thing that uses atomic clocks, like GPS). The extra second will be … Continue Reading
On May 19, 2015, the Financial Stability Oversight Council (FSOC), established under the Dodd-Frank Wall Street Reform and Consumer Protection Act to oversee risks to the U.S. financial system, issued its Fifth Annual Report, highlighting the need for heightened risk management and supervisory attention in eleven different areas: Cybersecurity Changes in financial market structure and … Continue Reading
The May 19, 2015 Fifth Annual Report, issued by the Financial Stability Oversight Council (FSOC), established under the Dodd-Frank Wall Street Reform and Consumer Protection Act to oversee risks to the U.S. financial system, highlighted several issues relating to financial institution activities and regulations. Increased risk taking in a low-yield environment FSOC indicated its concern … Continue Reading
The Fifth Annual Report issued May 19, 2015, by the Financial Stability Oversight Council (FSOC), established under the Dodd-Frank Wall Street Reform and Consumer Protection Act to oversee risks to the U.S. financial system. Themes discussed in the report included cybersecurity, market structure, reference rates and data collection. Cybersecurity The report highlights FSOC’s increasing concerns … Continue Reading
The Equity Market Structure Advisory Committee of the Securities and Exchange Commission (SEC) will be holding its first meeting starting at 9:30 am Eastern Time on May 13, 2015 to discuss the impact of SEC Rule 611 of Regulation NMS — the SEC’s “order protection” or “trade-through” Rule — on US equity market structure. The SEC’s Division of … Continue Reading
On May 6, 2015, the Securities and Exchange Commission (SEC) approved a joint plan to be entered into by the Financial Industry Regulatory Authority (FINRA) and the US exchanges for implementing a pilot test to analyze the effects of wider minimum quotation increments on market quality for stocks of smaller companies. The tick test pilot will begin … Continue Reading
On November 19, 2014, the SEC adopted Regulation SCI – Regulation Systems Compliance and Integrity, to require: national securities exchanges alternative trading systems that exceed defined volume thresholds (but excluding ATSs limited to municipal securities and corporate debt) registered clearing agencies quotation and last sale reporting processors, and certain exempt clearing agencies whose exemptions were … Continue Reading
Non-US marketplaces have struggled with how, in an electronic trading environment, to adequately ensure that securities transactions taking place outside of the US comply with applicable exemptions from registration under the Securities Act of 1933 (1933 Act). Regulation S under the 1933 Act provides a conditional “safe harbor” establishing conditions under which offshore offers and … Continue Reading
On October 6, the NYSE Group announced that the board of NYSE Regulation had determined to take back market surveillance functions for its three US equities exchanges and two options exchanges from the Financial Industry Regulatory Authority (FINRA) following the expiration of its contract with FINRA on December 31, 2015. NYSE Regulation selected Cinnober Financial … Continue Reading
The FINRA Board of Governors (the “Board”) met last week to discuss a number of upcoming rule proposals and initiatives, many which focus on high-frequency trading and market transparency. FINRA Chairman and CEO Rick Ketchum stated that he believes these proposals address Securities and Exchange Commission (“SEC”) Chair Mary Jo White’s call to action for … Continue Reading
The Financial Industry Regulatory Authority (“FINRA”), the principal U.S. self-regulatory organization for securities dealers in the United States, has adopted new supplementary material to Rule 5210, which generally imposes a requirement that reported transactions in securities reflect bona fide purchase and sale transactions. This supplementary material, described in Regulatory Notice 14-28 (June 2014), provides that … Continue Reading
In July, the Trading Examinations Unit within the Trading and Financial Compliance Examinations group at the Financial Industry Regulatory Authority (FINRA), the principal US securities industry self-regulatory organization, published a targeted examination letter being sent to some FINRA member firms as part of a review of processes and procedures in connection with order routing and … Continue Reading
In June, the Securities and Exchange Commission (SEC) directed that the US exchanges and the Financial Industry Regulatory Authority (FINRA) propose a joint plan for implementing a pilot test to analyze the effects of wider minimum quotation increments on market quality for small cap stocks. On August 27, the SEC published this joint plan with … Continue Reading
Recently, both the Securities and Exchange Commission (the “SEC”) and the Financial Industry Regulatory Authority (“FINRA”) have taken steps to promote greater transparency in the U.S. fixed income markets. FINRA now publicly disseminates Rule 144A transaction data in corporate debt securities. In addition, SEC Chair Mary Jo White discussed the SEC’s plans to enhance disclosure … Continue Reading
