May 13, 2015
FINRA Revises Sanction Guidelines
On May 12, 2015 FINRA announced revisions to the Sanction Guidelines. The revisions focus on misrepresentations and suitability. Adjudicators are being urged to consider bars in instances of intentional or reckless fraud and expelling firms where aggravating factors are predominant. Please click here for a link…
October 7, 2014
NYSE GROUP TO REENGAGE ITS SURVEILLANCE, INVESTIGATION AND ENFORCEMENT PROGRAM
On October 6, 2014, the NYSE Group announced that it will not renew its contract with FINRA for the surveillance, investigations and enforcement program related to its exchanges. The contract with FINRA expires on December 31, 2015.
October 3, 2014
FINRA BOARD BUSY AT SEPTEMBER MEETING—FOCUS ON HFT
The September Board meeting of FINRA had a full agenda. The primary focus was on high frequency trading and equity market transparency. One of the more controversial proposal is a new series of registration for persons who set algorithmic strategies. Also on the docket was a new recruiting proposal which…
September 10, 2014
FINRA Fines Goldman Sachs for Failing to Prevent Trade-Throughs on SIGMA-X System
On June 5, 2014, FINRA announced an $800,000 fine against Goldman Sachs for "failing to have reasonably designed written policies and procedures in place to prevent trade-throughs of protected quotations" in Sigma X, its dark pool. Dark pools allow investors to trade stocks anonymously and report trade data after the deals are completed. The price at which shares are offered for sale in dark pools is not visible to anyone, even those participating in them. These alternative trading systems have been criticized recently for their lack of transparency and because the rise of dark pools has reduced trading on exchanges that publicly quote prices, which could lead to less efficient pricing.
July 30, 2014
Revisions to FINRA Rule 5210 to Address Self-Trades
On August 25, 2014, firms must enact policies and procedures to address self-trading from algorithms and trading desks, in accordance with new supplementary material to FINRA Rule 5210. In particular, the firm must reasonably design policies and procedures that pertain to a single algorithm or trade desk (or related algorithms…
July 29, 2014
FINRA Begins Publicly Disseminating Rule 144A Corporate Debt Transaction Data
On June 30, 2014, FINRA began publicly releasing Rule 144A corporate debt transaction data through the Trade Reporting and Compliance Engine (TRACE).
July 29, 2014
FINRA Bars Broker for Alleged Insider Trading of Japanese Stock
FINRA has barred former equity trader Kenneth Ronald Allen from associating with any FINRA member for allegedly selling short Japanese stock based on inside information. FINRA alleged that Allen, a former equity trader with First New York Securities LLC, acted on a tip containing material, non-public information received from a corporate insider when he traded Japanese securities in September 2010.
July 11, 2014
FINRA Proposes New Mark-Up Rule—No Changes from NASD Rule
On May 21, 2014 FINRA proposed rule changes to the SEC, adopting current NASD Rule 2440 and Interpretive Material 2440-1 and 2440-2 as FINRA Rule 2121.
June 19, 2014
FINRA Clarifies Classification and Trade Reporting of Hybrid Securities
FINRA recently published guidance that now requires firms to report over-the-counter (OTC) trades in covered hybrid securities to the Trade Reporting and Compliance Engine (TRACE) rather than to the OTC Reporting Facility (ORF) effective June 16, 2014.Generally, FINRA requires OTC transactions in TRACE-eligible debt securities to be reported to…
June 13, 2014
FINRA Proposed Amendment to Communication with Public Rule to Incorporate Link to BrokerCheck.
FINRA has requested comments on proposed FINRA Rule 2210(d)(8), which would require a firm to have a hyperlink to BrokerCheck on any website that is available to retail investors, and in any online retail communications that include the professional profile or contact information of an associated person. The purpose of…