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Stories of Interest
- North Korean caught secretly mining bitcoin rival
- IPO Timelines Cut by 80% After SEC's Private Filing Decision
- How the Carried Interest Break Survived the Tax Bill
- FINRA: The Neutral Corner
- Coinbasex Says Buying and Selling Temporarily Disabled Amid Price Rout
- Bitcoin plunges by more than a third in a single day
- Goldman Is Setting Up a Cryptocurrency Trading Desk
- Jefferies Lets Employees Choose When to Receive Their Bonuses
- UBS Told to Pay $903K After Losing Retaliation Verdict
- BEWARE: Long Island Iced Tea Shares Soar After Changing Name to Long Blockchain
- Gary Cohn’s Last Laugh: Cashing Out on Trump’s Tax Plan
- E*Trade Lets Customers Trade in CBOE Bitcoin Futures
- Swiss Find Serious Shortcomings at JPMorgan in 1MDB Case
- Washington-based Investment Adviser and His Business Partner Charged in Multi-Million Dollar Scheme
- FINRA Board of Governors Meeting
- Cryptocurrency Market Now Doing Same Daily Volume as the NYSE
- Jailed Barclays Trader Must Pay $400,000 From Libor Profits
- Trump Asks ‘How’s Your 401(k)?’ But Most Voters Don’t Have One
- A Bitcoin Hedge Fund’s Return: 25,004% (That Wasn’t a Typo)
- Madoff Victims Near Full Recovery of Principal With Payout
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NEWSLETTERS & ALERTS
FINRA Initiates Sweep Exam: Order Routing Conflicts
In early November, the Trading & Financial Compliance Examinations section of FINRA Market Regulation (Market Regulation) began a SWEEP EXAMINATION to evaluate what impact the receipt of order routing inducements - e.g., payment for order flow and maker-taker rebates - has on firms' [equities and options] order routing practices and decisions.
As part of this review, selected member firms have been asked to provide complete and detailed responses to the following:
1. How does the Firm quantify the benefits, if any, to [FIRM] customers from the Firm’s receipt of order routing inducements, such as payment for order flow and maker-taker rebates? Provide analytical or other evidence of such quantified benefits.
2. Describe how [FIRM] fulfills the Firm's duty of best execution and quantifies the benefits, if any, to its customers when routing orders of a particular type to a market center with transaction costs for that order type that are materially higher than the transaction costs for the same order type on other market centers.
3. Describe how [FIRM] manages the conflict of interest that exists between the Firm’s duty of best execution to customers and the Firm’s own financial interests in situations where the Firm routes customer orders to market centers that pay order routing inducements, such as payment for order flow and maker-taker rebates, or internalizes customer orders (e.g. routing customer orders to an affiliated over-the-counter market maker or alternative trading system in which the Firm has a financial interest).