The Financial Industry Regulatory Authority announced that its new rule requiring the registration of persons associated with a member that are either primarily responsible for the development of an algorithmic trading strategy or the day-to-day supervision of such activities will be effective January 30, 2017. By such date, all relevant persons must have taken and passed the Series 57 exam and be registered with FINRA as a Securities Trader. Under FINRA’s rule, an algorithmic trading strategy is an automated system that generates or routes orders but does not include such a system that solely routes orders in their entirety to a market center. Order routing systems captured by FINRA’s definition include those that divide large lot orders into smaller lot orders “less likely to result in market impact” and those used to determine the price or size of orders, the use of parent and child orders, or displayed versus non-displayed trading interest. All algorithmic trading strategies involving equity and preferred or convertible debt securities are within scope. (Click here for further details regarding FINRA’s new rule in the Advisory, “FINRA Seeks Comment on Proposal Requiring Registration of Associated Persons Who Develop Algorithmic Trading Strategies” of March 26, 2015, by Katten Muchin Rosenman LLP.)