05 August, 2024
Working Group Updates 8/5/2024
05 August, 2024
- FIF Webinar on Trade Surveillance. On July 30, FIF hosted a webinar on trade surveillance for the Compliance and Surveillance Working Group. Tom Jordan, the FIF Advisory Committee Chair, moderated the panel. The panelists were Steve Bonanno of BXS, Ted Karn of The Karn Group, Chris Montagnino of Jordan & Jordan, and Jeremy Vest of S3. Topics discussed during the panel included: monitoring that the surveillance program is working as designed; configuration of alert thresholds; managing the exception handling process; outsourcing of surveillance and required oversight of vendors; and use of AI for surveillance (value and limitations).
- FIF OFR Repo Reporting Working Group. The OFR Repo Reporting Working Group continued its discussion of implementation of the new regulatory requirement to report non-centrally clearing bilateral repos to the OFR. The Working Group discussed the scope of reportable repos, reporting for repos that were opened prior to the initial compliance date, the definition of Business Day for reporting, reporting for open repos, calculating the outstanding commitment for a repo, and a scenario where variation margin is posted based on a pool of repos. The Working Group reviewed and discussed a draft supplemental FIF letter to the OFR.
- FIF Short Sales / Reg SHO / Short Reporting Working Group. This past week, FIF hosted two calls for this Working Group to continue discussing the implementation of the SEC’s Rule 13f-2 and Form SHO reporting. During both calls, the Working Group continued its review and discussion of a draft follow-up FIF letter to the SEC relating to the implementation of Rule 13f-2 reporting. The letter requests guidance on how to calculate the gross short position for various scenarios, requests confirmation of previous guidance provided by the SEC, requests additional guidance relating to Form SHO reporting, requests that the SEC publish written FAQs relating to Form SHO reporting, and recommends various steps for the SEC to take, including a delay in the implementation date and relief from calculating shares outstanding based on the current Form SHO instructions.
- FIF Rule 606 Working Group. The Rule 606 Working Group discussed Rule 606(a) reporting for pre-market limit orders and whether to include not held orders in the denominator when calculating the percentage of orders routed to a venue. The Working Group discussed the current status on FINRA Rule 6470. The Working Group discussed a draft FIF letter to the SEC requesting guidance on how to calculate the percentage of orders routed to different venues for Rule 606(a) reporting.
- FIF Front Office Committee. The Front Office Committee reviewed applicable updates and notices from the SEC, FINRA, FINRA CAT and the equity and option exchanges. The spotlight presenter was Mark Davies of S3, who discussed recent and upcoming implementations, including FINRA Rules 6151 and 6470 and SEC Rule 605. Please find this months agenda here.
- FIF Data and Technology Committee. The Data and Technology Committee reviewed capacity, latency and volume data for the prior month for the equity, options, currency, crypto and futures markets. The spotlight presenter was Shelly Brown from MIAX, who provided an update on the launch of the MIAX Sapphire options exchange. Please find the meeting materials here and the full capacity reports here.
- Tax Information Reporting Working Group. Stevie Conlon, Anna Vayser and Robert Schwaba from Wolters Kluwer reviewed and discussed the final IRS digital asset broker reporting regulations. Please find the spotlight presentation here.
- FIF CAT Monthly Update Working Group. The Working Group reviewed guidance and updates from the CAT Plan Participants and FINRA CAT on CAT Transaction Reporting, CAT CAIS and CAT billing during the prior month. The Working Group also reviewed the current areas of focus for FIF members and the current open issues for CAT Transaction Reporting, CAT CAIS reporting and CAT billing.
- FIF CAT CAIS Working Group. The CAIS Working Group reviewed updated FAQ Q19 relating to full account refreshes. The Working Group discussed the scenarios for permitted use of the Authorized Trader Names List. The Working Group discussed Material Inconsistencies where multiple submitting firms submit for a single reporting firm, including FDIDs in the daily Outstanding Material Inconsistencies file, including FDIDs for Customer rejections, and cascading errors generated by the CAIS system.
- FIF CAT Transaction Reporting Working Group. The CAT Transaction Reporting Working Group reviewed updated FAQ B37 relating to buy-ins. The Working Group reviewed a draft letter to FINRA on CAT reporting of partial cancels. The Working Group continued its discussion on CAT billing and reconciliation. The Working Group discussed the SEC’s Order Instituting Proceedings relating to the CAT Plan Participant filing to reduce CAT costs. The Working Group discussed CAT Alert 2024-01 relating to Mapping of Exempted Port-level Settings.
Eduard Kotlyar