21 November, 2022
Working Group Update 11/21/2022
21 November, 2022
- Fractional Share Orders. FIF hosted a joint call for the Compliance and Surveillance Working Group and the Back Office Committee focused on fractional share orders. Topics of discussion included: fractional share workflows; routing of orders and allocation of executed shares; trading capacity (mixed agency versus principal); restrictions on trading as principal for affiliated advisory accounts; classification of fractional share orders as held and not held; orders received prior to market open; trading along (FINRA Rule 5320); and TRF and CAT reporting issues.
- Cybersecurity Working Group. FIF members participated on a call with SEC staff members to discuss cybersecurity issues.
- 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 November Agenda here.
- 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 November Agenda here.
- FIF CAT Transaction Reporting Working Group. The CAT Transaction Reporting Working Group discussed reporting for verbal quotes and RFQ responses. The Working Group reviewed a draft FIF letter to the SROs requesting an extension of the compliance date for having an accepted FDID record in CAIS for any FDID reported to the CAT Transaction Reporting system. The Working Group discussed scenarios where a firm assigns FDIDs the evening that a new account is opened and trades or on the following day.
- FIF CAT CAIS Working Group. The CAIS Working Group reviewed a revised draft letter to the CAT Operating Committee requesting extensions of the compliance dates for the Full CAIS milestones and the compliance date for having an accepted FDID record in CAIS for any FDID reported to the CAT Transaction Reporting system. FIF submitted this letter to the CAT Operating Committee. The Working Group discussed additional CAIS system issues relating to Material Inconsistencies. The Working Group discussed CAIS system misreporting of Error Codes 3701 through 3712. The Working Group discussed reporting for a scenario where a closed account has unresolved errors in CAIS. The Working Group discussed the November 15 presentation by FINRA CAT on FDID validations. The Working Group discussed the CAT NMS Plan requirements relating to the Full CAIS live date and validation of FDIDs. The Working Group discussed the need for the CAT Operating Committee to update the priority level of various known issues. The Working Group discussed the scenario where an FDID is submitted to and rejected by CAIS and then generates an error in the CAT Transaction Reporting system.
Eduard Kotlyar