BOX receives approval for new open-outcry trading floor. The SEC approved BOX Options Exchange LLC’s plan to allow for open-outcry trading on BOX’s physical trading floor in Chicago. According to Bloomberg, BOX’s open-outcry trading floor, which will open later this month, illustrates how the US equity options market has resisted the move to automated trading embraced by most other exchanges. (8/2/2017)
FINRA, SIPC streamline broker-dealer reporting process. The Financial Industry Regulatory Authority and the Securities Investor Protection Corporation have adopted a simplified filing process for broker-dealers to submit their annual reports, which will permit firms that currently file annual reports separately with SIPC and FINRA to file just once using FINRA’s existing reporting portal. The new filing process will become effective on September 1, 2017. (8/1/2017) FINRA press release.
SEC approves amendments to MSRB’s customer account transfer rule. The MSRB received approval from the SEC to adopt amendments to its rule on customer account transfers, which will modernize the rule and harmonize it with the customer account transfer rules of other self-regulatory organizations in an effort to promote a uniform standard. The amended rule will become effective on January 29, 2018. (7/31/2017) MSRB regulatory notice.
MSRB recommends that issuers limit involvement in underwriter’s selection of counsel. The MSRB issued guidance to municipal securities issuers regarding the potential conflicts of interest presented by the practice of issuers designating the counsel of their underwriters, or influencing the underwriter’s selection of counsel. The MSRB recommended that issuers limit their involvement in the underwriter’s selection of counsel to concerns regarding competency, conflicts of interest and the avoidance of excessive costs. (7/27/2017) MSRB regulatory notice.
FINRA, exchanges sanction four firms for violating the Market Access Rule. FINRA, along with Bats, The NASDAQ Stock Market LLC, the New York Stock Exchange, and their affiliated exchanges have sanctioned four firms for violating various provisions of the Market Access Rule and related exchange supervisory rules. FINRA and the exchanges alleged that the firms violated the Market Access Rule by failing to implement risk management controls and procedures designed to prevent the entry of erroneous or duplicative orders; prevent the entry of orders that exceeded appropriate pre-set credit or capital thresholds; or supervise customer trading to detect and prevent potentially violative and manipulative activity. The firms also failed to comply with their obligations under the supervisory rules of FINRA and the exchanges to establish and maintain a reasonably designed system to supervise the activities of their customers. Without admitting or denying the allegations, the firms settled the charges by agreeing to be censured and paying fines ranging from US$450,000 to US$2.5 million. (7/27/2017) FINRA press release.