Trading & Markets Counseling

  • Representing a leading options market maker in successfully petitioning the SEC to exercise its discretion to review action taken by the Division of Trading and Markets staff approving a controversial capital-raising plan proposed by the Options Clearing Corporation and opposed by industry participants.
  • Representing a leading global derivatives market-place with respect to securities regulatory matters before the SEC Division of Trading and Markets.
  • Advising on establishing a "robo adviser."
  • Assisting and advising a broker-dealer regarding Regulation SHO, ATS and NMS requirements.
  • Represented FINRA and several national securities exchanges in drafting proposed SRO pilot plan to increase tick size.
  • Advising a prime broker on the establishment of a registered investment company margin lending platform.
  • Representing leading fixed income ATSs regarding TRACE reporting issues.
  • Representing a fixed income pricing service in commenting on FINRA and MSRB rule proposals.
  • Advising multiple market participants with clearing agency regulatory issues.
  • Advising on Regulation SHO Rule 204 compliance.
  • Advising a buy-side and sell-side market participants on Regulation SHO compliance matters.
  • Advising broker-dealers and asset managers regarding Regulation M Rule 105 compliance.
  • Assisting in the preparation of CEO of financial institution for testimony related to high frequency trading and equity market structure issues before the Senate Permanent Subcommittee on Investigations and the Senate Banking Committee.
  • Advising an expert network firm regarding policies relating to the protection of confidential, material, non-public information.
  • Advising client on matters relating to digital currency-denominated securities trading.

Looking Forward

In 2019, the SEC’s Division of Trading and Markets (T&M) continued to tackle thorny issues, such as market data reform, the transaction fees pilot, market quality for thinly-traded stocks, Regulation Best Interest, CAT implementation, and exchange applications to list cryptocurrency-related ETFs. FINRA and other SROs continued to focus on algorithmic trading, code development, and market access controls. T&M issued a surprising and welcome no-action letter that takes a “sandbox” approach to facilitating competition in the clearing agency space and incorporating blockchain technology.

We expect more of the same in 2020. Cybersecurity, FinTech issues, market access, and manipulation (such as “layering”) will continue to receive a good deal of attention and will likely continue to be key issues covered during regulatory examinations. We expect continued SEC and FINRA focus on conflicts of interest and expect further clarification on Regulation BI. We expect that more requests for regulatory “sandbox” pilots will be submitted to T&M and that the Commission will take action on proposed major amendments to Rule 15c2-11 that governs OTC market making.

Finally, we believe the SEC will continue to focus on SRO governance, fees, and risk management. As exchanges expand in the U.S. equities space (e.g., the Long Term Stock Exchange and the prospective Members Exchange or MEMX), and seek to incorporate novel technology in exchange operations (as in the proposed Boston Security Token Exchange), we expect that the resulting liquidity diffusion and operational issues will continue to draw the attention of legislators, regulators, and pundits alike. Volatility will continue to be a key factor in 2020, as will the reaction of global markets as various geopolitical issues play-out, including major trade issues and the U.S. presidential election. In addition to good theater, as the U.S. contest continues to gain speed it will likely feed additional market uncertainty which typically drives volatility.