The Board of Governors (the Board) of the Financial Industry Regulatory Authority is scheduled to meet on September 19 to consider rule proposals requiring heightened oversight of computerized trading strategies and greater transparency and disclosures by private trading platforms. The FINRA Board will consider issuing guidance regarding a member firm’s obligations to supervise the development, testing and use of algorithmic trading strategies, and will consider a rule proposal requiring the registration of employees who develop or supervise the development of computerized strategies used to facilitate algorithmic trading. The proposals also would require alternative trading systems (ATSs) to provide FINRA with additional order book information (e.g., buy and sell orders) to enhance FINRA’s surveillance and oversight of ATSs. Currently, ATSs (also referred to as dark pools) do not post buy and sell orders, but only report trades after they take place.
After the September 19 meeting, FINRA will notify member firms via email about the FINRA Board’s actions on the proposed items and anticipated next steps, if any.
Click here to read the FINRA Board’s Rulemaking Items for Discussion at the September 2014 Meeting.