Financial Industry Regulatory Authority

FINRA Forms Arbitration Task Force

On July 17th, the Financial Industry Regulatory Authority announced the formation of a 13-member Arbitration Task Force to consider possible enhancements to its arbitration forum to improve the transparency, impartiality and efficiency of FINRA’s securities arbitration forum for all participants. FINRA Press Release.

Amendments to Unlisted DPP and REIT Rules Proposed

On July 16th, the SEC provided notice of the Financial Industry Regulatory Authority’s filing of an amendment to its proposed rules to the provisions in the FINRA rulebook addressing per share estimated valuations for unlisted direct participation program and real estate investment trust securities. Comments should be submitted within 21 days after publication in the Federal Register, which is expected during the week of July 21. SEC Release No. 34- 72626.



On July 17th, Business Week explained how NASDAQ’s computers systems were infiltrated by Russian hackers in 2012, how the U.S. responded, and speculated on the reasons behind the attack. Hack.

SEC Denies NASDAQ Request to Increase Customer Rebates

On July 16th, the SEC denied NASDAQ OMX PHLX’s proposed amendments to its customer rebate program to increase the customer rebates available to certain market participants that transact electronically-delivered customer orders on Phlx or its affiliated options exchanges. SEC Release No. 34-72633.

Modification to Order Execution Algorithm Approved

On July 14th, the SEC approved NASDAQ OMX PHLX’s proposed modifications to its order execution algorithm at the NASDAQ OMX PSX facility. The Exchange proposes to adopt a system under which a security may trade using one of three execution algorithms: (1) the current price/time model; (2) a pro rata algorithm based on the price and size of posted orders, with allocations made on a pro rata basis among orders with similar price and display characteristics; or (3) a variation of the Pro Rata Algorithm that awards a minimum 40 per cent allocation of an incoming executable order to the displayed order that establishes the best price. SEC Release No. 34- 72603.


Elimination of Certain Order Types Proposed

On July 10th, the SEC provided notice of NYSE Arca’s filing of a proposal that would amend Rules 7.6, 7.11, 7.16, 7.31, 7.34, 7.35, 7.37 and 7.65 to eliminate certain order types, modifiers and related references. Comments should be submitted on or before August 6, 2014. SEC Release No. 34-72591.