The AWC highlights the importance of member firms having supervisory procedures relating to changes in technology routines.
A planned change in a technology routine, whether as a result of new equipment, changes in software or both, should trigger an evaluation of whether the change relates to, or may affect, a regulatory requirement, including, as in the AWC, a trade reporting requirement. That evaluation should be documented. Firms may want to have that evaluation reviewed and…
This AWC concerns a brokerage firm that acted as a market-maker in OTC securities. In connection therewith, the firm regularly received electronic messages from other broker-dealers indicating an interest to buy or sell a specific number of shares of a security at a particular price. The firm, however, used a manual process to compare these electronic messages with its existing order book with the result that, on occasion, the firm failed to execute a resting order received from a customer…
FINRA Rule requires principal registration of persons "actively engaged in the management of the member's investment banking or securities business." Drawing lines between activities by owners that trigger registration and those that do not, however, can often be difficult. That is not the case here, where the breadth of the indirect owner's involvement clearly pointed towards the need for principal registration.
While unregistered owners can dictate their firm's direction and…
Technological and operational changes often have unanticipated adverse impacts on related regulatory functions. Firms making changes to their technology and operational environment must try to anticipate and test for possible adverse impacts before instituting such changes. Moreover, because the full impact of any change may not be identified in a test environment, firms should also monitor for adverse impacts once the technology or operational change goes live.
Recent Articles & Comments
The AWC highlights the importance of member firms having supervisory procedures relating to changes in technology routines.
A planned change in a technology routine, whether as a result of new equipment, changes in software or both, should trigger an evaluation of whether the change relates to, or may affect, a regulatory requirement, including, as in the AWC, a trade reporting requirement. That evaluation should be documented. Firms may want to have that evaluation reviewed and…
This AWC concerns a brokerage firm that acted as a market-maker in OTC securities. In connection therewith, the firm regularly received electronic messages from other broker-dealers indicating an interest to buy or sell a specific number of shares of a security at a particular price. The firm, however, used a manual process to compare these electronic messages with its existing order book with the result that, on occasion, the firm failed to execute a resting order received from a customer…
FINRA Rule requires principal registration of persons "actively engaged in the management of the member's investment banking or securities business." Drawing lines between activities by owners that trigger registration and those that do not, however, can often be difficult. That is not the case here, where the breadth of the indirect owner's involvement clearly pointed towards the need for principal registration.
While unregistered owners can dictate their firm's direction and…
Technological and operational changes often have unanticipated adverse impacts on related regulatory functions. Firms making changes to their technology and operational environment must try to anticipate and test for possible adverse impacts before instituting such changes. Moreover, because the full impact of any change may not be identified in a test environment, firms should also monitor for adverse impacts once the technology or operational change goes live.