Financial Industry Regulatory Authority
Proxy Rate Reimbursement and Enhanced Brokers' Internet Platforms Amendments.
On January 30th, the Financial Industry Regulatory Authority Announced that effective January 1, 2014, it has 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 rule change also establishes a specified success fee for the development of qualified Internet platforms for proxy voting purposes (the Enhanced Brokers' Internet Platform or EBIP). FINRA Regulatory Notice 14-03.
FINRA to Consider Amending Expungement Rules.
On January 29th, the Wall Street Journal reported that the Financial Industry Regulatory Authority will consider amendments prohibiting brokers from asking customers, as part of a settlement, to allow the broker to expunge the customer's complaint from the broker's record. Expungement.
FINRA Proposes Margin Requirements for TBA Market.
On January 27th, the Financial Industry Regulatory Authority requested comment on proposed amendments to FINRA Rule 4210 to establish margin requirements for transactions in the To Be Announced market. The proposal addresses, among other things, maintenance margin and variation margin requirements, risk limit determinations, concentrated exposures, and exemptions for de minimis transfer amounts and for transactions cleared through registered clearing agencies. Comments should be submitted on or before February 26, 2014.FINRA Regulatory Notice 14-02.
Proposed ADF Amendments Approved.
On January 27th, the SEC approved the Financial Industry Regulatory Authority's proposed amendment of FINRA Rules 6271 and 6272 regarding the requirements for members seeking registration as FINRA Alternative Display Facility Market Participants. SEC Release No. 34-71407. See also FINRA Regulatory Notice 14-04(amendments are effective February 3, 2014).
NASDAQ OMX Group
Price Wars Come to Options Exchanges.
On January 30th, Reuters discussed NASDAQ OMX Group's proposal to lower fees on its options exchanges and the furor that proposal has sparked. Price Wars.
National Futures Association
NFA Authorized to Receive SAR Data.
On January 27th, the National Futures Association advised that the CFTC has requested NFA Members to provide NFA with information on suspicious activity report ("SAR") filings upon NFA's request. The Bank Secrecy Act prohibits FCMs and IBs from disclosing that a SAR was filed, or any information that would reveal the existence of a SAR to the person involved in the transaction, as well as any other person except as specifically authorized by regulation. The regulation further provides that FCMs and IBs are permitted to make SARs and related SAR information available to NFA upon the request of the CFTC. On January 8, 2014, the CFTC provided NFA with a letter that formally requests all FCMs and IBs to make certain SAR filing information available to NFA, if requested by NFA. NFA Notice I-14-04.
Account Type Indicators.
On January 30th, the New York Stock Exchange advised that it has determined to temporarily suspend implementing the Account Type Indicators ("ATI") phase-in while the Exchange assesses the list of ATIs. Member organizations may continue using the ATIs the Exchange proposed eliminating until further notice. The Exchange had previously advised that it was eliminating certain obsolete equities ATIs. NYSE Information Memo 14-4.
Amendments to Bid and Offer Rules Proposed.
On January 28th, the SEC provided notice of NYSE Arca's filing of proposed amendments to its rules governing the priority of bids and offers on the Consolidated Book that would revise the order of priority of bids and offers for orders in open outcry. Specifically, the Exchange proposes to afford priority to bids and offers represented by Market Makers and Floor Brokers over certain equal-priced bids and offers of non—Customers on the Consolidated Book during the execution of an order in open outcry on the floor of the Exchange. Comments should be submitted within 21 days after publication in the Federal Register, which is expected during the week of February 3. SEC Release No. 34-71425.
Enhanced Brokers' Internet Platform Fees.
On January 24th, 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 ("EBIP"). The new rule requires a member organization to provide timely notification to the Exchange when an EBIP becomes operational, including details of any limitations on the availability of the EBIP to such member organization's customers. NYSE Regulation Information Memo 14-3.