October 6, 2015

October 06, 2015

October 05, 2015

FINRA (Financial Industry Regulatory Authority) Amends Rules to Address Extraordinary Market Volatility

The Financial Industry Regulatory Authority adopted rule amendments in furtherance of the joint industry Regulation NMS Plan to Address Extraordinary Market Volatility (Plan). Pursuant to the Plan, FINRA amended its rules to, among other things, require members that are trading centers in national market system (NMS) stocks to have written policies and procedures preventing the execution and display of offers outside the Plan's price band for each tier of NMS stocks. Trading centers must also have written policies and procedures to prevent the execution of trades in NMS stocks during a trading pause. The rule amendments are effective April 8, 2013.

FINRA also expanded the scope of Rule 11892 to apply to all over-the-counter transactions, including transactions subject to the Plan. Transactions that occur within the Plan’s price bands could still be deemed clearly erroneous under Rule 11892. Certain transactions occurring outside the Plan’s price bands will also be deemed clearly erroneous.The rule amendments became effective on January 30.

More information is available here.

©2015 Katten Muchin Rosenman LLP


About this Author

Janet M. Angstadt, Securities Lawyer, Katten Muchin

Janet M. Angstadt is the head of Katten's Chicago Financial Services practice. She focuses her practice on broker-dealer and exchange compliance issues and advises companies on matters regarding compliance with the regulations of the US Securities and Exchange Commission (SEC) and self-regulatory organizations (SROs).

Janet represents clients in a wide range of legal and regulatory matters, including mergers and acquisitions, SRO investigations, compliance issues related to registrations, sales practice, short sales, Regulation NMS, market-making and options and equities order...

James M. Brady, Katten Muchin Law Firm, Finance Attorney

James Brady concentrates his practice in financial services matters.

While in law school, James was an editor of the Michigan Journal of International Law. He also served as a judicial intern to the Honorable Stephen J. Markman of the Michigan Supreme Court. http://www.kattenlaw.com/James-Brady