12 December, 2022
Working Group Update 12/12/2022
12 December, 2022
- FIF Rule 606 Working Group. The Rule 606 Working Group discussed the rule filing submitted by FINRA to the SEC on Disclosure of Order Routing Information for OTC Equities (SR-FINRA-2022-031). The Working Group continued its prior discussion of the recent Risk Alert published by the SEC’s Division of Examinations on Observations Related to Regulation NMS Rule 606 Disclosures.
- Fractional Share Orders. FIF hosted a joint call for the Compliance and Surveillance Working Group andthe Back Office and Front Office Committees focused on fractional share orders. Topics of discussion included proxy voting for fractional share positions, enabling the transfer of fractional positions through DTCC and fractional share workflows.
- Trade Surveillance Panel Discussion. FIF hosted a panel discussion on trade surveillance for the FIF Compliance and Surveillance Working Group and the FIF Front Office Committee. The panelists were Mark Davies of S3, Brett MacLeod of Abel Noser and Andrew White of Broadridge. Holly Dito of Pershing moderated the panel. The panelists discussed the scope of trade surveillance, T+1 vs. real-time surveillance, use of AI for surveillance, trade surveillance based on business activity (retail; institutional; market making; exchange; ATS; clearing firm), standardization vs. customization, reviewing and updating parameters, checking and challenging your trade surveillance program, trade surveillance for foreign markets, and trade surveillance across products.
- FIF CAT CAIS Working Group. On December 6 FIF submitted a letter to the SEC relating to the Full CAIS compliance date. The CAIS Working Group discussed this letter and next steps. The Working Group discussed issues and questions from FIF members relating to Material Inconsistencies. The Working Group discussed FINRA CAT’s December 1 updates to various documents to reflect the new Full CAIS compliance dates.
- FIF CAT Transaction Reporting Working Group. The CAT Transaction Reporting Working Group discussed linkage error 3702 for Allocations when a firm approves a sub-account on T+1. The Working Group discussed reporting by a clearing broker for an Automated Investment Plan made available to customers of its introducing broker. On December 5, FIF members had a call with the CAT Operating Committee to discuss the exchanges providing certification testing results to CAT. A Working Group member updated the group about this call. The Working Group reviewed a draft FIF letter to the SEC in support of an exemption from the requirement for firms to report verbal quotes to CAT. FIF members participated on a call with SEC staff members to discuss CAT reporting of port settings by routing firms.
Eduard Kotlyar