The SEC recently voted to adopt amendments to Rule 606 of Regulation NMS (the “Final Rule”) that expand broker-dealers’ disclosure obligations with regard to how they handle investors’ orders. Specifically, the Final Rule requires broker-dealers, beginning May 20, 2019, (i) to provide, upon request, individualized reports in a standardized format containing information on their handling of customers’ “not held” orders (i.e., those orders for which the broker has price and time discretion) and (ii) to…

The Director of the SEC’s Division of Trading and Markets, Brett Redfearn, recently provided an update on the status of the consolidated audit trail (the “CAT”), which is being developed by the SROs and Thesys Technologies, LLC, the CAT plan processor.  The public statement noted that although the SROs were required to begin reporting to the CAT on November 15, 2017 under the CAT NMS Plan approved by the SEC, reporting has not yet begun.…

In the first major trading and markets initiative under SEC Chairman Jay Clayton, on March 14, 2018, the SEC proposed to establish a transaction fee pilot program to study the effects of maker-taker fee structures. A pilot study was initially recommended by the SEC’s Equity Market Structure Advisory Committee in 2016, and the Treasury Department also expressed support for such an initiative in last year’s report on capital markets regulation (see our previous blog post…

The past few days have seen several interesting developments in the law and regulation of digital tokens.  Each action reflects an intense focus by U.S. regulators to clarify the treatment of digital tokens, from those issued by startups in initial coin offerings (ICOs) to the more “traditional” cryptocurrencies such as bitcoin and litecoin, as well as the regulatory status under U.S. law of persons engaging in certain activities involving digital tokens.  These actions are merely…

Responding to a 2016 request by the SEC (in consultation with the Treasury Department), FINRA recently reviewed the extent to which various FINRA rules apply to U.S. Treasury securities.  Following up on that analysis, on February 6, 2018, FINRA issued Regulatory Notice 18-05, requesting comment on whether it should eliminate certain exclusions from the application of its rules for U.S. Treasury securities and other government securities.  FINRA is also requesting comment on whether certain…

In a move that took some by surprise, SEC Chairman Jay Clayton on Tuesday rejected requests from the SROs to delay the implementation of the Consolidated Audit Trail (“CAT”), despite the SROs’ cybersecurity concerns and indications that the CAT is not yet operationally ready.  Thus, the first phase of CAT reporting technically went into effect on Wednesday. The exemptive request submitted by the SROs sought a one-year delay of the first phase of data reporting…