Maker-Taker Reform.

On February 20th, Bloomberg reported stock exchange representatives and participants have been lobbying the SEC as part of an effort to reform the "maker-taker" system in which exchanges pay rebates to traders for their business. Maker-Taker Reform.

Longer Period Designated to Consider Qualified Contingent Cross Proposals.

On February 18th, the SEC designated April 7, 2014 as the date by which it will approve, disapprove, or institute disapproval proceedings regarding the International Securities Exchange's and Topaz Exchange's separately proposed amendments addressing the number and size of counterparties to a Qualified Contingent Cross Order.

Financial Industry Regulatory Authority

SEC Approves FINRA BrokerCheck Proposals.

On February 20th, the Financial Industry Regulatory Authority announced the SEC approved two rule changes related to FINRA Rule 8312 (FINRA BrokerCheck Disclosure). First, the SEC approved amendments to permanently make publicly available in BrokerCheck information about former associated persons of a FINRA member firm who were registered on or after August 16, 1999, and who have been the subject of an investment-related civil action brought by a state or foreign financial regulatory authority that was dismissed pursuant to a settlement agreement. Second, the SEC approved amendments to include in BrokerCheck information about member firms and their associated persons of any registered national securities exchange that uses the Central Registration Depository for registration purposes. Both rule changes will become effective on June 23, 2014. FINRA Regulatory Notice 14-08.

FINRA ATS Proposal Approved.

On February 14th, the Financial Industry Regulatory Authority announced SEC approval of a proposal requiring alternative trading systems ("ATS") to report to FINRA weekly volume information and number of securities transactions within the ATS by security, and acquire and use a single, unique market participant identifier when reporting information to FINRA. FINRA Regulatory Notice 14-07.

ICE Clear Europe

Clearance of New Sovereign CDS Proposed.

On February 19th, the SEC provided notice of ICE Clear Europe's filing of a proposed rule change to allow it to provide for the clearance of new CDS contracts. They are Western European Sovereign CDS contracts referencing the Republic of Ireland, Italian Republic, Portuguese Republic, and Kingdom of Spain. Comments should be submitted within 21 days after publication in the Federal Register, which is expected during the week of February 24. SEC Release No. 34-71574.

International Swaps and Derivatives Association

ISDA Publishes 2014 Credit Derivative Definitions.

On February 21st, the International Swaps and Derivatives Association published the 2014 ISDA Credit Derivatives Definitions, a revised version of the 2003 ISDA Credit Derivatives Definitions that contains the basic terms used in the documentation of most credit derivatives transactions. ISDA Press Release.

Municipal Securities Rulemaking Board

MSRB Proposes Retail Investor Best Execution Requirement.

On February 19th, the Municipal Securities Rulemaking Board requested public comment on a proposal to establish for the first time explicit requirements for municipal securities dealers to seek the most favorable price possible when executing transactions for retail investors. The MSRB also seeks comment on an exception from the new rule for transactions with sophisticated municipal market professionals. Comments should be submitted on or before March 21, 2014. MSRB Press Release.


NASDAQ Proposes Kill Switch.

On February 18th, the SEC granted immediate effectiveness to the NASDAQ Stock Market's proposal to add a risk management tool commonly known as a "Kill Switch." The new Kill Switch feature will be optional and will be offered at no charge effective March 1, 2014. It will allow market participants to control, for each Market Participant Identifier ("MPID"), the total Net Notional Risk Exposure ("NNRE") they are prepared to accept per trading session. If a market participant exceeds their pre-established NNRE the access ports associated with that MPID will be disabled and open exposure on the NASDAQ Market under that MPID will be administratively cancelled. Comments should be submitted within 21 days after publication in the Federal Register, which is expected during the week of February 24. SEC Release No. 34-71555.