SIFMA to Nasdaq-UTP Plan Operating Committee: Selection Process for Nasdaq SIP “Highly Flawed”

SIFMA sent a letter to the operating committee for the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privilege Basis ("Nasdaq-UTP Plan") criticizing the process of selecting a replacement for Nasdaq as the Securities Information Processor ("SIP") operator.

SIFMA explained that SIPs are critical industry facilities, and reminded the operating committee that SIFMA has called repeatedly for a change in the governance of all National Market System ("NMS") plans ("NMS Plans") for the various SIPs. According to SIFMA, the published reports of the selection process being carried out by the Nasdaq-UTP Plan "clearly show that the current governance structure of the SIPs is ineffective and must be reformed."

SIFMA stated that the current SIP governance structure "suffers from a lack of transparency and insulated governance," explaining that because SROs have not made any changes to the governance structure for SIP NMS Plans, the selection process for the Nasdaq SIP is "highly flawed." According to SIFMA, NMS Plans should include direct representatives from the industry and the public who have voting power on the operating committees.

Additionally, SIFMA outlined specific concerns and provided follow-up questions in response to the operating committee's April 23, 2014 letter to SIFMA.

See: SIFMA Letter to Nasdaq-UTP Plan Operating Committee.