January 23, 2022

Volume XII, Number 23

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January 21, 2022

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January 20, 2022

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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 Plans price bands could still be deemed clearly erroneous under Rule 11892. Certain transactions occurring outside the Plans price bands will also be deemed clearly erroneous.The rule amendments became effective on January 30.

More information is available here.

©2022 Katten Muchin Rosenman LLPNational Law Review, Volume III, Number 77
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About this Author

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

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

312-902-5362
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