FINRA issues Regulatory Notice on new registration requirements for associated persons involved in algorithmic trading strategies. The Financial Industry Regulatory Authority offered guidance on recently approved amendments to its rules, which will become effective on January 30, 2017, that will require each associated person who is responsible for the design, development or significant modification of algorithmic trading strategies, or who is responsible for the supervision or direction of such activities, to register as a Securities Trader and pass the Series 57 exam. (6/6/2016) FINRA Regulatory Notice 16-21.
NFA notifies swap dealers of required margin questionnaire. The National Futures Association announced that swap dealers must complete and submit a short questionnaire related to its margin requirements for uncleared swaps through the NFA’s EasyFile Registration Documentation Submission System by June 15, 2016. (6/1/2016) NFA Notice I-16-15.
NYSE Information Memo on floor conduct policies. The New York Stock Exchange LLC published an updated Information Memo that advises members of the policies governing conduct on NYSE premises, including the trading floor. (6/1/2016) NYSE Information Memo 16-08.
FINRA publishes regulatory notice on new OATS requirements to identify non-FINRA member broker-dealers. FINRA offered guidance to firms regarding recent amendments to the Order Audit Trail System, effective August 1, 2016, that will require reporting firms to include either the Central Registration Depository number or the SRO-assigned identifier of US-registered broker-dealers that are not FINRA members and broker-dealers that are not registered in the US. (5/27/2016) FINRA Regulatory Notice 16-20.
FINRA issues regulatory notice on the use of stop orders during market volatility. FINRA published guidance for firms on the use of stop orders during volatile market conditions that encouraged firms to review their practices regarding stop orders, to train their representatives regarding the risks associated with stop orders, and to provide comprehensive disclosures to customers that enter stop orders directly online. (5/26/2016) FINRA Regulatory Notice 16-19.
NYSE offers guidance to DMMs on correct coding of delayed openings and trading halts. NYSE reminded Designated Market Makers and DMM units that they may be subject to disciplinary action if they fail to enter the correct reason code into the Display Book when publishing either an opening price indication or halting a stock. (5/24/2016) NYSE Information Memo 16-07.
Firm culture will remain a priority for FINRA, says Ketchum. In remarks at the 2016 FINRA Annual Conference, FINRA CEO Richard Ketchum indicated that FINRA will continue to focus on firm culture as it conducts examinations and considers enforcement actions against firms. (5/23/2016) Ketchum remarks.
FINRA publishes Cybersecurity Checklist for small firms. FINRA published a Cybersecurity Checklist that offers guidance to small firms in establishing cybersecurity programs. (5/23/2016) FINRA press release.
NYSE reminds members of obligations regarding disruptive trading activity.NYSE published an Information Memo on disruptive trading activity that identifies the factors that NYSE will consider when determining whether or not trading constitutes disruptive activity and discusses situations that can constitute disruptive activity. (5/19/2016) NYSE Information Memo 16-06.
FINRA charges financial firm and officers with misconduct in fraudulent municipal bond sales. FINRA filed a disciplinary complaint against a financial firm and its CEO, charging them with securities fraud in connection with the sale of municipal revenue bonds to customers. FINRA alleged that the firm and its CEO conducted bond offerings and secondary market bond sales related to an Arizona charter school and two assisted living facilities in Alabama, but failed to disclose to investors that the school and assisted living facilities were under financial stress. Instead, the firm and the CEO transferred millions of dollars from a deceased customer’s charitable trust account to disguise the school’s and facilities’ financial difficulties. FINRA also charged the CEO and the firm’s Chief Operating Officer with self-dealing for abusing their positions as co-trustees of the charitable trust. (5/19/2016) FINRA press release.