NYSE Regulation, Inc. (NYSER) has issued regulatory guidance on the appropriate handling of large orders. The guidance is based on the results of NYSER’s recent survey of large and medium New York Stock Exchange and NYSE Amex LLC member organizations regarding their supervision and control of large agency and proprietary orders that may have a significant market impact, particularly at or near the close of markets. The guidance identifies certain common elements of effective supervision of large order trading and facilitation in connection with the requirements under NYSE Rule 342 for member organizations to maintain written policies, procedures and supervisory controls reasonably designed to assure compliance with all rule requirements, including detecting and preventing potentially violative conduct in connection with the handling of large orders that may have a market impact. The common elements discussed relate to a firm’s written policies and procedures, identification of supervisory personnel, reports, pre- and post-trade reviews, issue escalation, pro-active trading limitations and customer disclosures.
Click here to read NYSER Information Memo 09-40.