05 February, 2024
Working Group Update 2/5/2024
05 February, 2024
- FIF Rule 605 Working Group. FIF updated the Working Group on the recent FIF member calls with Gary Gensler (SEC Chair), Sai Rao (Policy Counsel to Chair Gensler), Jessica Wachter (SEC Chief Economist and Director of the SEC’s Division of Economic and Risk Analysis), Haoxiang Zhu (Director of the SEC’s Division of Trading and Markets) and other SEC representatives to discuss the FIF comment letters on the SEC’s rule proposal to modernize Rule 605. The Working Group discussed next steps for FIF with respect to this rule filing.
- FIF Fractional Shares Subgroup. FIF hosted a call for the Fractional Shares Subgroup to discuss a question from an FIF member on the confirmation requirements when a fractional share position originated in the dividend reinvestment process is liquidated.
- FIF Cybersecurity Working Group. Matt Weinberg of the Cybersecurity and Infrastructure Agenda (CISA) provided an update on current threats to the financial industry and recent activities of CISA and other government agencies. CISA is an agency of the US Department of Homeland Security. Jim Dolan of Kezar reviewed recent FINRA and NSA updates relating to cybersecurity. Please find the CISA quarterly update here.
- FIF TRACE Working Group. The TRACE Working Group reviewed and discussed the first draft of an FIF comment letter on (i) the January 11 rule filing by FINRA to reduce to one minute the TRACE reporting timeframe for securities that are currently subject to a fifteen-minute reporting timeframe and (ii) the parallel rule filing by the MSRB on January 12.
- FIF Compliance and Surveillance Working Group; AML and Sanctions. Satish Kini and Robert Dura of the Debevoise law firm reviewed 2023 developments relating to anti-money laundering and sanctions regulations and key issues to focus on for 2024. FIF invited the members of the Compliance and Surveillance Working Group and the SEC FINRA Regulations Working Group to participate on this call.
- Review of Current SEC and FINRA Rulemaking Initiatives. FIF hosted a call for the Compliance and Surveillance Working Group and the SEC FINRA Regulations Working Group to continue the review of current SEC and FINRA rulemaking initiatives. The call focused on a review of current SEC and FINRA initiatives in the following areas: Options; Fixed Income; Security-Based Swaps; Multiple Asset Classes; and Compliance and Proceedings.
- FIF Data and Technology Committee; Limit Up-Limit Down; Market Data Governance Plan. The Data and Technology Committee reviewed capacity, latency and volume data for the prior month for the equity, options, currency, crypto and futures markets. FIF reviewed the SRO rule filings (A) to change the limit up-limit down parameters for ETFs, and (B) to revise the market data governance plan. Please find the meeting materials here and the full capacity report here.
- FIF CAT Monthly Update Working Group Call. The CAT Monthly Update Working reviewed guidance and updates from the CAT Plan Participants and FINRA CAT on CAT Transaction Reporting, CAT CAIS and CAT billing reporting 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 Transaction Reporting Working Group. FIF hosted two calls this past week for the CAT Transaction Reporting Working Group. During the first call, the Working Group continued its discussion of CAT billing and reconciliation. The Working Group discussed a recommendation from an FIF member that the CAT Plan Participants amend the CAT NMS Plan to provide for CAT to bill the executing broker for both sides of an off-exchange transaction. During the second call, the Working Group discussed a recent notification from a representative for the CAT Plan Participants that the SEC would provide exemptive relief from reporting NIA (not immediately actionable) RFQ responses to CAT, and that the exemptive relief would extend through July 2026. The Working Group reviewed and discussed responses from FINRA CAT representatives to questions that FIF had submitted relating to the new and updated handling instructions for auctions. The Working Group discussed the exemptive relief issued by the SEC in November 2023 to extend the T+1 linkage deadline. The Working Group discussed reporting for unstructured RFQ responses.
Eduard Kotlyar