30 October, 2023
Working Group Update 10/31/2023
30 October, 2023
- FIF Securities Lending Transparency Working Group. Ignacio Sandoval of the Morgan Lewis law firm reviewed the SEC’s recent adoption of a rule to require Reporting of Securities Loans.
- FIF Rule 606 Working Group. The Rule 606 Working Group discussed issues and questions from FIF members, including the period for calculating the exemption from reporting venues that represent less than 5% of routing volume if 90% of routing volume is reported, Rule 606 reporting for the pass-through ofCAT fees, Rule 606 reporting for fractional shares, and links to exchange fee schedules.
- FIF TRACE Working Group. The TRACE Working Group discussed changes to the FINRA master file for foreign sovereign bonds, the TRACE New Issue Form as applied to foreign sovereign bonds, and reporting the timestamp increment where a portfolio trade includes Treasury and other bonds.
- FIF Compliance and Surveillance and Regulatory Reporting Fines Working Groups. FIF hosted a call for the Compliance and Surveillance and Regulatory Reporting Fines Working Groups to review regulatory reporting fines for 2022 and 2023, including CAT, EBS, LOPR, Rule 605, Rule 606, short interest reporting, and swap data reporting. FIF will review fines for TRACE, trade advertising and TRF/ORF on the next call. All firm names and dates were excluded from the presentation. Later this week, FIF will send a copy of the presentation to Working Group members.
- FIF Front Office Committee; Regulatory Reporting Changes for T+1. The Front Office Committee reviewed applicable updates and notices from the SEC, FINRA, FINRA CAT and the equity and option exchanges. In addition to the regular agenda, the FIF Co-Chairs reviewed an outline of regulatory reporting changes for T+1. Please find the Front Office Agenda here.
- FIF Data and Technology Committee; SEC Proposal on Exchange Volume-Based Pricing. The Data and Technology Committee reviewed capacity, latency and volume data for the prior month for the equity, options, currency, crypto and futures markets. In addition to the regular agenda, FIF reviewed, and the Working Group discussed, the October 18 SEC rule proposal on Volume-Based Exchange Transaction Pricing for NMS Stocks. Please find the meeting materials here and the full capacity statistics here.
- Enhancing the Section 31 Reconciliation Process. FIF hosted a call for the CAT Transaction Reporting Working Group to discuss a proposal by the FIF Section 31 sub-group to enhance the reconciliation process for Section 31 fees. During the call, the Working Group reviewed a draft presentation to FINRA requesting that FINRA provide additional data to industry members to facilitate reconciliation of Section 31 fees.
- FIF CAT CAIS Working Group. The CAIS Working Group discussed a draft list of requests from FIF members to enhance CAIS system feedback. FIF submitted these requests to FINRA CAT. The Working Group discussed the recent update to the correctionList in CAIS to include additional error codes. The Working Group discussed the prior requests for clarification submitted by FIF to FINRA CAT relating to the reloading of historical data to CAIS.
- FIF CAT Transaction Reporting Working Group. FIF hosted three calls this week for the CAT Transaction Reporting Working Group. During the first call, the Working Group discussed reconciliation for CAT billing and issues with inputting a contact person for billing in the CAT portal. During the second call, the Working Group discussed CAT reporting for non-executable RFQ responses. This included an update from an RFQ platform operator, discussion of a follow-up request from FINRA CAT relating to the reporting of the duration of a non-executable RFQ response, and discussion of feedback from FINRA CAT relating to the reporting of the relativePrice field. The Working Group discussed the new requirement that a firm report to CAT when the firm relies on the bona fide market making exception from the Reg SHO locate requirement. The Working Group discussed the SEC’s decision not to require a new buy-to-cover order marker. Subsequent to this call, FIF submitted a letter to FINRA CAT relating to the reporting of the duration of a non-executable RFQ response. During the third call, the Working Group reviewed a draft FIF letter to the CAT Plan Participants and FINRA CAT requesting that FINRA CAT provide specific data elements to industry members to facilitate reconciliation of monthly invoices. After this call, FIF submitted this letter to the CAT Plan Participants and FINRA CAT.
Eduard Kotlyar