Exchanges Propose Tick Size Pilot

On November 3rd, the SEC provided notice of a joint industry plan to implement a tick size pilot for small companies. The proposed plan sets forth the procedures for selecting a representative group of stocks of small capitalization companies (“Pilot Securities”) and subjecting groups of those Pilot Securities (“Test Groups”) to various requirements with regards to quoting and trading increments. Participants would be required to adopt rules to ensure that Pilot Securities in the Test Groups are quoted and traded in permitted increments. Comments should be submitted on or before December 22, 2014. SEC Release No. 34-73511.

BATS Exchange

BATS One Feed Withdrawn

On November 6th, the SEC provided notice of the withdrawal by BATS Exchange, EDGA Exchange, and EDGX Exchange of individually submitted proposed rule changes that would have established for each, a new market data product called the BATS One Feed. SEC Release No. 34-73549.

Financial Industry Regulatory Authority

FINRA Survey Finds Investor Support for Regulation

On November 6th, the Financial Industry Regulatory Authority published the results of its survey of U.S. investors. The survey measured perceptions of fairness and gauged demand for additional regulatory protections. FINRA surveyed 1,000 adults and found that 92 percent of investors agreed (62 percent strongly agreed and 30 percent somewhat agreed) that it is important to have a regulatory “cop on the beat” to protect investors and police the markets. In addition, 70 percent of investors surveyed strongly agreed and 24 percent of investors somewhat agreed that it is important that regulators use the latest tools and technology to protect investors. FINRA Press Release.

ICE Clear Credit

Clearance of Certain Western European Sovereign Swaps is Approved

On November 5th, the SEC approved ICE Clear Credit’s proposed addition of Subchapter 26I and to amend the ICC Risk Management Framework to provide for the clearance of Standard Western European Sovereign credit default swap contracts, specifically the Republic of Ireland, the Italian Republic, the Portuguese Republic, and the Kingdom of Spain. SEC Release No. 34-73534.

Municipal Securities Rulemaking Board

MSRB to Extend Pay-to-Play Rule

On November 3rd, Bloomberg reported the Municipal Securities Rulemaking Board is preparing a proposed rule that would prohibit municipal bond advisors from making political contributions to officials responsible for awarding municipal bond contracts. Pay-to -Play.


Fee Proposal Withdrawn

On November 6th, the SEC provided notice of NASDAQ Stock Market’s withdrawal of a proposed rule change that would have removed from Exchange rules, fee provisions with respect to third-party data feeds that Nasdaq receives from multiple sources and then re-transmits to clients in connection with the Exchange’s co-location services. SEC Release No. 34-73550.

Legging Orders Approved

On November 6th, the SEC granted accelerated approval to NASDAQ OMX PHLX’s proposed adoption of rules governing the trading of “legging orders.” SEC Release No. 34-73545.

National Futures Association

Changes to Public Display of FCM Financial Information

On November 3rd, the National Futures Association advised of updates and changes to the information displayed on each FCM’s BASIC page. Information from a FCM’s Segregated Investments Detail Report (“SIDR”) will be displayed as a percentage on each FCM’s Customer Segregated Funds, Customer Secured Amount Funds and Cleared Swaps Customer Collateral reports, as applicable. This new information, along with other modifications to the display, will be included in the FCM’s BASIC page beginning with the November 17, 2014 SIDR filing, which will appear on BASIC on November 25, 2014. NFA Notice I-14-28.

Electronic Filing of IB Financial Reports

On October 31st, the National Futures Association reminded members that beginning that day, all IB financial reports must be filed electronically, including annual certified FOCUS reports submitted by IBs that also are broker/dealers. NFA Notice I-14-27.


New Data Feed Approved

On November 6th, the SEC granted accelerated approval to the New York Stock Exchange’s proposed establishment of the NYSE Best Quote & Trades data feed. SEC Release No. 34-73553.

Post-Trade Adjustment Service Fee Proposed

On November 6th, the SEC provided notice of NYSE MKT’s filing of a proposal to add a service fee for certain post-trade adjustments performed by the Exchange. The purpose of the proposed service fee is to ensure a fair and reasonable use of Exchange resources by allowing the Exchange to recoup for employee time and resources expended on post-trade adjustments that may also be self-executed by ATP Holders. In addition, the Exchange believes that the proposed service fee would incentivize ATP Holders to process their own post-trade adjustments going forward. The Exchange proposes to implement the fee change effective December 1, 2014. Comments should be submitted within 21 days after publication in the Federal Register, which is expected during the week of November 10. SEC Release No. 34-73542.

The Options Clearing Corporation

Risk Management Proposal Approved

On October 31st, the SEC approved The Options Clearing Corporation’s (“OCC”) proposal aimed at improving its ability to manage concentration risk and wrong-way risk associated with accepting deposits of common stock for margin purposes. The proposal adds an Interpretation and Policy to Rule 604, which specifies the forms of margin assets accepted by OCC that will provide OCC with discretion with respect to giving value to assets deposited by a single clearing member to satisfy its margin requirement(s). In addition, the OCC proposal makes clarifying amendments to an existing Interpretation and Policy under Rule 604 that gives OCC discretion to not give value to a particular type of margin collateral across all clearing members. SEC Release No. 34-73483.