FINRA Proposes Prohibiting Certain Disruptive Quoting and Trading Activity

FINRA proposed: (i) adopting new supplementary material to FINRA Rule 5210 to prohibit two specific types of disruptive quoting and trading activity; and (ii) amending the FINRA Rule 9800 Series to permit FINRA to initiate expedited proceedings for violations of the quoting and trading restrictions set forth in the new supplementary material.

FINRA stated that the proposed rule changes mirror the framework recently adopted by the Bats BZX Exchange, Inc. and the Nasdaq Stock Market LLC but also build off of FINRA's existing process for issuing temporary cease and desist orders. FINRA emphasized that "having the authority to issue a cease and desist order on an expedited basis to stop certain well-defined disruptive and manipulative quoting and trading activity when the activity is persistent would significantly enhance FINRA's ability to protect investors and market integrity."

FINRA filed the proposed rule change to be effective immediately. The implementation date will be 30 days after the date of the filing.