Regulation Channel

FINRA Dealt Setback in OTC Plan

The Securities and Exchange Commission has halted plans by the Financial Industry Regulatory Authority to impose a new quoting regime on the over-the-counter market, citing concerns over market quality.

Critics of FINRA's proposal, namely two large OTC players, say the lower quote size would negatively impact liquidity and ultimately hurt investors.

FSOC Tackles Market Structure

Trading desks are starting to get visits from Washington's new super regulator: the Financial Stability Oversight Council. Formed in 2010 by the Dodd-Frank Act, FSOC is an inter-agency regulatory body chaired by the U.S. Treasury and charged with identifying risks in the U.S. financial system.

Commentary: Up in the Air

Columnist Dan Mathisson takes aim at rules governing portable electronic devices on airplanes and compares them to the reason behind the Volcker rule. Read on and find out why.

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Top Predictions for 2012

As regulators start to press their agendas for the coming year, Traders Magazine asked some industry experts what they expect to be the biggest regulatory and market structure issues of 2012. Here are their responses:

SEC Quashes Nasdaq Proposal

Nasdaq OMX, on the verge of creating a stock exchange for small companies, was dealt a setback by the Securities and Exchange Commission over a plan to ask issuers to pay market makers for quoting.

Word for Word

Ed Knight, general counsel at Nasdaq OMX, testified before the Senate Banking Committee in December on the status of small capitalizations stocks. Knight argued the marketplace was overly fragmented and that exchanges needed government help in supporting the trading of small company stocks.

This Year

What's in store for the trading business in 2012? First off, the Securities and Exchange Commission is in the process of writing the Volcker rule. The ability to quote in subpennies is another issue that could come to fruition this year. Also, the cover story on transaction-cost analysis or TCA looks at how this old hand is maturing into something meaningful for traders.

Keeping Pace

In 2011, electronic trading and fragmentation drove the Canadian equities market into the 21st century-at least by U.S. standards. As a result, regulators will take center stage in the coming year to ensure the Great White North's markets stay accessible, secure and true to the Canadian spirit.

Market Makers Eye Volcker Rule

The Volcker rule as currently written will affect market making on equities trading desks by limiting their abilities to facilitate trading. Subsequently, this will raise trading costs and hinder liquidity, sources tell Traders Magazine.

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Articles from this Site

• FINRA Dealt Setback in OTC Plan
• FSOC Tackles Market Structure
• Commentary: Up in the Air
• WSPs Growing Fatter With New Regs
• What’s in Store for 2012?
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