The trade-through rule, also known as Rule 611 of Regulation NMS, is intended to ensure that orders do not execute at prices that are inferior to the best protected bid/offer on any "trading center." Orders executed at a price that is inferior to protected bids/offers are considered to "trade through" the better priced orders.
Rule 611(a)(1) requires "trading centers" to establish, maintain, and enforce written policies and procedures that are reasonably designed to prevent…
The AWC involved the Firm's failure to provide accurate quarterly reports pursuant to Rule 606 of Regulation NMS. In large part, this resulted from the Firm's failure to conduct reviews to ensure that the data that was provided by the Firm to a third-party vendor, which prepared the reports, was complete and accurate. The AWC also identified shortcomings in the Firm's WSPs relating to the review of the accuracy and completeness of the data streams used to prepare the reports, the manner in…
The restrictions imposed on trade-throughs by Rule 611 of Regulation NMS, which apply to NMS Stocks and listed options, have been in place since 2005 and are fundamental to the structure of the U.S. equity and option markets. Changes to Rule 611 hold the promise of significantly impacting market structure, including market fragmentation and displayed liquidity, and market participants, including exchanges, high frequency trading firms and other trading venues.
The AWC lists 7 separate violations, consisting of (i) failure to conduct required office inspections, (ii) failure to conduct reasonable supervisory testing, (iii) failure to establish WSPs for the review of outside brokerage accounts as well as the failure to review a significant number of outside brokerage accounts, (iv) failure to timely update two Form U4s and failure to report civil litigation to FINRA, (v) failure to review electronic correspondence for evidence of customer complaints…
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The trade-through rule, also known as Rule 611 of Regulation NMS, is intended to ensure that orders do not execute at prices that are inferior to the best protected bid/offer on any "trading center." Orders executed at a price that is inferior to protected bids/offers are considered to "trade through" the better priced orders.
Rule 611(a)(1) requires "trading centers" to establish, maintain, and enforce written policies and procedures that are reasonably designed to prevent…
The AWC involved the Firm's failure to provide accurate quarterly reports pursuant to Rule 606 of Regulation NMS. In large part, this resulted from the Firm's failure to conduct reviews to ensure that the data that was provided by the Firm to a third-party vendor, which prepared the reports, was complete and accurate. The AWC also identified shortcomings in the Firm's WSPs relating to the review of the accuracy and completeness of the data streams used to prepare the reports, the manner in…
The restrictions imposed on trade-throughs by Rule 611 of Regulation NMS, which apply to NMS Stocks and listed options, have been in place since 2005 and are fundamental to the structure of the U.S. equity and option markets. Changes to Rule 611 hold the promise of significantly impacting market structure, including market fragmentation and displayed liquidity, and market participants, including exchanges, high frequency trading firms and other trading venues.
While a roundtable is…
The AWC lists 7 separate violations, consisting of (i) failure to conduct required office inspections, (ii) failure to conduct reasonable supervisory testing, (iii) failure to establish WSPs for the review of outside brokerage accounts as well as the failure to review a significant number of outside brokerage accounts, (iv) failure to timely update two Form U4s and failure to report civil litigation to FINRA, (v) failure to review electronic correspondence for evidence of customer complaints…