31 May, 2022
Working Group Update 5/31/2022
31 May, 2022
- Rule 606 Working Group. The FIF Rule 606 Working Group discussed recent guidance from FINRA to two industry members requiring additional detail in the Rule 606(a) material disclosures. The Working Group also discussed current FIF member efforts to implement Rule 606(a) options look-through.
- TRACE/Fixed Income Working Group. The FIF TRACE/Fixed Income Working Group discussed the recent FINRA rule filing with the SEC to expand TRACE reporting to cover transactions in US dollar denominated foreign sovereign bonds. The Working Group discussed the implementation status of the rule recently adopted by FINRA to require the reporting of a portfolio trade modifier for applicable transactions in corporate bonds.
- Data & Technology Committee. The FIF Data & Technology Committee reviewed capacity, latency and volume data for the prior month for the equity, options, currency, crypto and futures markets. The spotlight presenter for the meeting was James Arrante of Cboe, who provided an update on FX trading. Please find the meeting materials here and the full capacity report here.
- Front Office Committee. The FIF Front Office Committee reviewed applicable updates and notices from the SEC, FINRA, FINRA CAT and the equity and option exchanges. Please find the May agenda here.
- Back Office Committee and Compliance Working Group (T+1). Jim Burns and Brant Brown from the Willkie Farr law firm reviewed the SEC’s T+1 rule proposal and discussed material issues raised by market participants in their comment letters on the rule proposal.
- TRACE/Fixed Income and Compliance Working Groups (SEC Rule 15c2-11 for fixed income). FIF hosted a call focused on implementation challenges firms are facing as a result of the SEC’s application of Rule 15c2-11 to fixed income securities. Jason Palsgrove of Bloomberg discussed the Bloomberg Fixed Income Quotation Transparency Product Related to SEC Rule 15c2-11. Mark Fitterman and Jennifer Connors from the Baker & McKenzie law firm also participated in the discussion.
- FIF CAT Transaction Reporting Working Group. The CAT Transaction Reporting Working Group reviewed responses from FINRA CAT to comments and questions previously submitted by FIF relating to the application of FDID validations to transaction events submitted prior to July 11, 2022 and reporting the OPT, ALO, OPO and STP handlingInstructions values. The Working Group continued its discussion of the linkage of representative and customer orders for position fill scenarios. The Working Group discussed issues and questions from FIF members relating to the most recent CAT fee proposal and how the regulators would determine the clearing broker for every execution and provide the necessary data for firms to reconcile their executed share totals.
- FIF CAT CAIS Working Group. The CAIS Working Group discussed recent FIF member results for CAIS testing and certification. The Working Group reviewed draft FIF member comments and questions for FINRA CAT relating to the description of the addressList field in the CAIS Technical Specifications, using corporate registries as a source for foreign identifiers, reporting for foreign trusts and foreign estates that do not have identifiers, reporting FDIDs that have more than 100 CAT Customers, and reporting for a foreign legal entity with no valid CAIS identifier where the firm has an identifier for a beneficial owner. FIF submitted these comments and questions to FINRA CAT. The Working Group reviewed issues and questions from FIF member relating to CAIS compliance error rate calculations, FDIDs with two CAT Customers with different names, different LEIs and the same EIN, discrepancies in the CAIS record count, manual corrections showing unresolved on the CAIS report card, FDID validations impacting the ability of firms to test CAT Transaction Reporting, CAT Customers with an EIN that also have a QI-EIN, WP-EIN or WT-EIN, the planned migration of options to NYSE Pillar on July 11, 2022, reporting CAT Customers in jurisdictions that do not issue foreign TINs, and updating the fdidDate and other date fields when an account is reopened. The Working Group discussed the status of FIF member implementation of the recently-introduced requirement to report an Authorized Traders Names List.
Eduard Kotlyar