US Exchanges and Self-Regulatory Organizations

SEC approves new FINRA financial and operational rules. The Financial Industry Regulatory Authority announced the SEC approved FINRA’s proposed rule change to adopt additional financial and operational rules for the consolidated FINRA rulebook. FINRA Rules 4314, 4330 and 4340 are new consolidated rules governing securities loans and borrowings, permissible use of customers’ securities and callable securities. The new rules are effective May 1, 2014. (2/3/2014) FINRA Regulatory Notice 14-5. 

ISDA credit derivative definitions. The International Swaps and Derivatives Association announced that the 2014 ISDA Credit Derivatives Definitions will be effective September 2014. (2/3/2014) ISDA press release. 

FINRA ADF amendments approved. The Financial Industry Regulatory Authority announced that the SEC has approved amendments to FINRA rules governing registration in and participation on the Alternative Display Facility (ADF). The amendments add new requirements to the application that prospective ADF market participants must submit to FINRA prior to submitting quotes on and reporting trades to the ADF. As part of the application process, the amendments require prospective ADF market participants to submit a deposit into escrow. The amendments also set forth the framework pursuant to which an ADF market participant may earn back some or all of its ADF Deposit Amount, enumerate additional documents that a firm seeking registration as an ADF market participant must execute, and clarify the process by which a firm’s registration as an ADF market participant becomes effective. The amendments were effective February 3, 2014. (1/31/2014) FINRA Regulatory Notice 14-4. 

Account Type Indicators. The New York Stock Exchange will temporarily suspend implementing the Account Type Indicators (ATI) phase-in while it assesses the list of ATIs. Members may continue using the ATIs the Exchange proposed eliminating until further notice. (1/30/2014) NYSE Information Memo 14-4. 

Amendments to FINRA Rule 2251. The Financial Industry Regulatory Authority amended the provisions of FINRA Rule 2251 regarding rates of reimbursement for expenses incurred in processing and forwarding of proxy and other issuer-related materials. The amendments also establish a specified success fee for the development of qualified Internet platforms for proxy voting purposes. The amendments were effective January 1, 2014. (1/30/2014) FINRA Regulatory Notice 14-03. 

Margin requirements proposed for TBA market. The Financial Industry Regulatory Authority seeks comment on proposed amendments to FINRA Rule 4210, which would establish margin requirements for transactions in the To Be Announced market. Comments should be submitted by February 26, 2014. (1/27/2014) FINRA Regulatory Notice 14-02. 

CFTC authorizes NFA to receive SAR data. The CFTC has provided the National Futures Association with a letter that formally requests all FCMs and IBs to make certain suspicious activity report filing information available to NFA, if requested by NFA. (1/27/2014) NFA Notice I-14-04. 

Enhanced brokers’ internet platform fees. NYSE Regulation issued an Information Memo concerning an amendment to Rule 451 of the NYSE Rulebook, which was effective January 1, 2014. The amendment permits member organizations to charge issuers a new fee in relation to the establishment of an Enhanced Brokers’ Internet Platform. (1/24/2014) NYSE Regulation Information Memo 14-3. 

NYSE DMM amendments. NYSE Euronext advised members that Rule 104 (Dealings and Responsibilities of DMMs) has been amended to add new section (j). The amendment codifies certain traditional Trading Floor functions that may be performed by DMMs; provides DMMs with access to certain market information; and amends Exchange rules governing the ability of DMMs to provide market information to Floor brokers. The amendments were implemented on January 27, 2014. (1/23/2014) NYSE Information Memo 14-2. 

FINRA investor alert. The Financial Industry Regulatory Authority issued an investor alert entitled “The IRA Rollover: 10 Tips to Making a Sound Decision.” The alert helps investors determine whether an IRA rollover is appropriate for them. (1/23/2014) FINRA press release. 

NFA studies capital requirements and customer protection measures. The National Futures Association is reviewing the current regulatory structure applicable to CPO and CTA operations. NFA is studying ways to strengthen the regulatory structure governing CPO operations to provide greater protection for customer funds. NFA is also exploring ways to ensure that CPOs and CTAs have sufficient assets to operate as a going concern. Comments should be submitted by April 15, 2014. (1/23/2014) NFA Notice to Members I-14-03. 

ISDA recommendation for FpML version 5.6. The International Swaps and Derivatives Association has published the Recommendation for Financial products Markup Language version 5.6. This version allows the industry to fulfill reporting requirements in jurisdictions where reporting to trade repositories is expected to begin in 2014. (1/22/2014) ISDA press release.