FINRA fines firm for Regulation SHO violations. FINRA announced sanctions against Stockcross Financial Services, Inc. for violations of Regulation SHO and other supervisory violations. FINRA discovered that between 2009 and 2013, flaws in Stockcross’s monitoring of its close-out obligations caused the firm to believe in error that it was not required to be either net flat or long in a security at the end of the day it purchased shares to meet its close-out obligation. Instead, Stockcross executed over 4,000 short sale transactions when it had outstanding close-out obligations, in violation of Regulation SHO. Without admitting or denying the allegations, Stockcross agreed to pay a US$800,000 fine and to provide FINRA with a report detailing the effectiveness of its Regulation SHO supervisory system within six months. (8/12/2015) FINRA press release.
FINRA Series 4 examination. FINRA announced changes to its Series 4 examination program for Registered Options Principals. The revisions will be implemented in examinations administered on or after September 28, 2015. (8/10/2015) FINRA Regulatory Notice 15-29.
NFA asset reporting requirements enter phase 2. The NFA announced that it will begin implementing Phase 2 of NFA Financial Requirements Section 14 on August 31, 2015. The program requires Forex Dealer Members holding assets used to cover retail forex customer liabilities to report balances daily to the NFA. Phase 2 will require all depositories holding assets to cover the amount owed to forex customers to report end-of-day balances beginning September 1, 2015. (8/7/2015) NFA Notice I-15-20.