Chicago Board Options Exchange

Longer Period Designated to Consider Complex Order Proposals

On October 22nd, the SEC designated December 5, 2014 as the date by which it will approve, disapprove or institute disapproval proceedings regarding the Chicago Board Options Exchange’s proposed rule changes relating to complex orders. SEC Release No. 34-73409.

Financial Industry Regulatory Authority

SEC Approves Supplemental Inventory Schedule

On October 23rd, the Financial Industry Regulatory Authority advised that the SEC approved the adoption of the Supplemental Inventory Schedule (“SIS”), a supplemental schedule that must be filed by a firm that is required to file FOCUS Report Part II, FOCUS Report Part IIA or FOGS Report Part I, and has inventory positions as of the end of the FOCUS or FOGS reporting period, unless the firm has (1) a minimum dollar net capital or liquid capital requirement of less than $100,000 or (2) inventory positions consisting only of money market mutual funds. The initial SIS disclosing inventory positions as of December 31, 2014, must be filed with FINRA on or before January 30, 2015. FINRA Regulatory Notice 14-43.


On October 23rd, Reuters reported the Financial Industry Regulatory Authority and the North American Securities Administrators Association are exploring possible new mechanisms by which brokers can seek expungement of customer complaints from their public records. Expungements.

Fixed Income Clearing Corporation

Rules Proposed for Credit Unions

On October 20th, the SEC provided notice of the Fixed Income Clearing Corporation’s filing of amendments to the Clearing Rules of the Mortgage-Backed Securities Division in order to establish a membership category and financial minimum requirements for insured credit unions. Comments should be submitted on or before November 14, 2014. SEC Release No. 34-73391.

Proposed Establishment of an Early Unwind Intraday Charge Approved

On October 17th, the SEC approved the Fixed Income Clearing Corporation’s proposed amendment of its Government Securities Division (“GSD”) Rulebook in order to establish an Early Unwind Intraday Charge to protect against the exposure that may result from a member’s intraday substitution of cash for securities that were used as collateral for a GCF Repo position the prior day (“Cash Substitution”) or a clearing bank unwind of the cash lending side of the transaction for an inter-bank GCF Repo transaction at 7:30 a.m. (ET) in connection with including the underlying collateral pertaining to the GCF Repo positions in GSD’s noon intraday participant Clearing Fund requirement calculation, and its hourly internal surveillance cycles. SEC Release No. 34-73389.

ICE Clear Credit

Longer Period Designated for Consideration of Proposed Clearance of Certain Western European Sovereign CDS

On October 17th, the SEC designated December 3, 2014 as the date by which it will approve, disapprove, or institute disapproval proceedings regarding ICE Clear Credit’s proposed adoption of new clearing rules and amendments to the ICC Risk Management Framework to provide for the clearance of Standard Western European Sovereign credit default swap (“CDS”) contracts, specifically the Republic of Ireland, the Italian Republic, the Portuguese Republic, and the Kingdom of Spain. Given that ICC does not currently provide clearing services for Western European Sovereign CDS, and it is proposing a new General Wrong Way Risk methodology to address the potential wrong way risk associated with the clearing of sovereign contracts, the Commission finds it appropriate to designate a longer period within which to take action on the proposed rule change. SEC Release No. 34-73384.


Amendment to IPO Trading Halt Rule Approved

On October 21st, the SEC approved the NASDAQ Stock Market’s proposed amendment of NASDAQ Rule 4120(c) to modify the parameters for releasing securities for trading upon the termination of a trading halt in a security that is the subject of an IPO. SEC Release No. 34-73399.