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Stories of Interest
- Sarah ten Siethoff is New Associate Director of SEC Investment Management Rulemaking Office
- Catherine Keating Appointed CEO of BNY Mellon Wealth Management
- Credit Suisse to Pay $47Mn to Resolve DOJ Asia Probe
- SEC Chair Clayton Goes 'Hat in Hand' Before Congress on 2019 Budget Request
- SEC's Opening Remarks to the Elder Justice Coordinating Council
- Massachusetts Jury Convicts CA Attorney of Securities Fraud
- Deutsche Bank Says 3 Senior Investment Bankers to Leave Firm
- World’s Biggest Hedge Fund Reportedly ‘Bearish On Financial Assets’
- SEC Fines Constant Contact, Popular Email Marketer, for Overstating Subscriber Numbers
- SocGen Agrees to Pay $1.3 Billion to End Libya, Libor Probes
- Cryptocurrency Exchange Bitfinex Briefly Halts Trading After Cyber Attack
- SEC Names Valerie Szczepanik Senior Advisor for Digital Assets and Innovation
- SEC Modernizes Delivery of Fund Reports, Seeks Public Feedback on Improving Fund Disclosure
- NYSE Says SEC Plan to Limit Exchange Rebates Would Hurt Investors
- Deutsche Bank faces another challenge with Fed stress test
- Former JPMorgan Broker Files racial discrimination suit against company
- $3.3Mn Winning Bid for Lunch with Warren Buffett
- Julie Erhardt is SEC's New Acting Chief Risk Officer
- Chyhe Becker is SEC's New Acting Chief Economist, Acting Director of Economic and Risk Analysis Division
- Getting a Handle on Virtual Currencies - FINRA
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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).