Commentary

John Turney
Traders Magazine Online News

Foreign Exchange Infrastructure: Yesterday, Today and Tomorrow

In this exclusive to Traders Magazine, John Turney, Global Head of Outsourced FX at Northern Trust, discusses the evolution of the fx infrastructure and what is to come.

Traders Poll

What is your favorite movie about trading?

Wall Street

23%

The Big Short

13%

Margin Call

6%

Equity

0%

Trading Places

38%

The Wolf of Wall Street

8%

Boiler Room

7%

Arbitrage

0%

Too Big to Fail

5%

Free Site Registration

January 30, 2008

Buyside Gets Clarification on Brokers Trading Alongside

By Peter Chapman

Buyside traders confused by new New York Stock Exchange rules designed to make it easier for broker-dealers to trade along with their orders received some solace late last year.

NYSE Regulation sent out a memo to its members clarifying a change it made to Rule 92 last summer. Rule 92 bars brokers from trading along with their institutional customers' orders. There are exceptions, though, and in those cases, the brokers must obtain consent from the money manager.

Until last summer, brokers had to obtain consent on an order-by-order basis. NYSE Reg's changes, though, liberalized the rule. Brokers can now request blanket consent from a customer covering all of the customer's trade-along orders. Brokers no longer have to ask for permission each time they trade alongside their customer.

The recent memo noted that a broker's customer can still give its consent on an order-by-order basis if it chooses.

Whichever method is used, the broker must keep records stating the contact name at the money manager and the percentage split of a trade-along order.

If blanket consent is used, the percentage split must be the same for every trade.

(c) 2008 Traders Magazine and SourceMedia, Inc. All Rights Reserved.

http://www.tradersmagazine.com http://www.sourcemedia.com