31 July, 2023
Working Group Update 7/31/2023
31 July, 2023
- Fried Frank Presentation on Recent Financial Risk Rulemaking Initiatives. Steven Lofchie and Nihal Patel of Fried Frank presented on the following recent SEC and FINRA financial risk rulemaking initiatives: (i) FINRA Seeks Comment on Concept Proposal for a Liquidity Risk Management Rule (FINRA Regulatory Notice 23-11); (ii) Proposed Rule Change to Provide Relief Relating to Specified Option Transactions under FINRA Rule 4210 (Margin Requirements) (SR-FINRA-2023-010); and (iii) the SEC rule proposal on Daily Computation of Customer and Broker-Dealer Reserve Requirements under the Broker-Dealer Customer Protection Rule.
- FIF Rule 606 Working Group. An FIF member updated the Working Group on guidance that the member received from SEC representatives on Rule 606(a) reporting (i) when a parent order is routed to multiple venues, and (ii) for orders received outside of regular market hours. The Working Group discussed which quote to use for classifying a limit order as marketable or non-marketable when the market data quotes are more granular than a firm’s route timestamp. The Working Group discussed Rule 606(a) reporting for multi-leg orders.
- 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. Please find the 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. Please find the meeting materials here and the market data capacity report here.
- FIF CAT CAIS Working Group. The CAT CAIS Working Group discussed CAIS errors from previously reported FDIDs that are now inactive and from erroneously reported FDIDs that never had CAT-reportable activity. The Working Group discussed potential FIF member questions for the upcoming FINRA CAT call.
- FIF CAT Transaction Reporting Working Group. The CAT Transaction Working Group discussed draft questions for FINRA CAT on reporting the customer display instruction flag field. FIF submitted these questions to FINRA CAT. The Working Group discussed reporting the PEG handlingInstructions value and reporting allocations for when-issued securities. The Working Group reviewed and discussed a revised draft comment letter to the SEC on CAT costs.
Eduard Kotlyar