22 April, 2024
Working Group Update 4/22/2024
22 April, 2024
- SEC Rule on Short Position and Short Activity Reporting. The FIF Short Sales / Reg SHO / Short Interest Reporting Working Group continued its review and discussion of implementation issues relating to SEC Rule 13f-2 on Short Position and Short Activity Reporting. The Working Group reviewed a draft FIF letter to the SEC requesting guidance on the implementation of Rule 13f-2.
- Rule 605 Working Group. The Rule 605 Working Group continued its review and discussion on the changes to Rule 605 that the SEC adopted on March 6, including the following issues and topics: time of receipt for midpoint-or-better limit orders; share weighting for calculating the average midpoint; reporting for trades that are cancelled or modified; reporting statistics relating to the best available displayed price; reporting executions that could have filled an order while the order was in effect; calculating size improvement; determining the notional value for marketable limit orders; and the definition of covered orders as applied to orders with stop prices.
- Tax Information Reporting Working Group. Representatives from Wolters Kluwer provided an update on amendments to the Section 871(m) regulations applying the Section 871(m) withholding tax on “dividend equivalent payments” to long U.S. equity-linked derivative positions that have a “delta” of .8 or greater.
- Back Office Committee. The Back Office Committee reviewed applicable FICC, DTC, NSCC, SEC, MSRB, OCC, IRS and FINRA updates during the past month. Please find the agenda here.
- FINRA Trade Reporting Notice on Fractional Share Transactions. FIF hosted a call for the Data and Technology Committee and the TRF/ORF Working Group to continue the discussion of the planned change by FINRA to provide for the reporting of fractional shares to the TRF.
- CAIS Working Group. The CAIS Working Group discussed reporting for the DVPCustodianID field when an identifier is not available. The Working Group discussed the ascending and descending functionality on the Completed Submissions tab of the CAIS portal. The Working Group discussed reporting of historical account changes for the scenario where an account is changed from INACTIVE to ACTIVE. The Working Group discussed various scenarios where a 3700 series error is generated for an account that a firm has ended or designated as inactive in CAIS. The Working Group discussed the need for additional clarity as to when firms are required to submit the Type 2 Disclosure Form. The Working Group continued its discussion of reporting for foreign trusts that do not have an identifier assigned by the foreign jurisdiction. The Working Group reviewed a draft submission by FIF to FINRA CAT relating to the scenario where an FDID mistakenly reported to CAT is subsequently corrected or deleted but generates a 3700 series error.
- CAT Transaction Reporting Working Group. The CAT Transaction Reporting Working Group discussed a scenario where a customer modifies and then cancels a GTC order after the close and the reporting firm does not accept or reject the modification prior to the cancel by the customer. The Working Group discussed whether the CAT system should add validations for mismatched handling instructions. The Working Group discussed how firms should report transactions in foreign securities that settle on T+2 in accordance with the standard settlement practices of the foreign jurisdiction. The Working Group continued its discussion of RFQ responses that are not immediately actionable.
Eduard Kotlyar