Self-Regulatory Organizations Response to SEC for Strengthening Critical Market Infrastructure
November 12 2013 - 7:47AM
Business Wire
--Collaborative effort to protect the integrity
of US trading markets and enhance investor confidence--
--Focus on the safeguards critical to strong
markets--
Self-regulatory organizations (SROs) for the equities and
options markets have been working with Securities and Exchange
Commission (SEC) staff on their collective plans to strengthen the
resilience, performance, disaster recovery capability and
governance of the critical infrastructure of the US capital
markets, including the Securities Information Processors (UTP, CTA
and OPRA).
The SROs have come to general agreement on certain
recommendations and preliminary implementation timetables in
response to the September 12, 2013 meeting between leaders of the
equities and options exchanges, FINRA, DTCC and Options Clearing
Corporation and SEC Chair Mary Jo White.
Specific details of the SROs’ proposals will be presented in
subsequent SRO rule filings and NMS Plan Amendments and will be
subject to public comment and SEC approval. The multi-pronged
proposals address each of the following areas identified in the
SEC’s September 12, 2013, press release:
- Securities
Information Processor (SIP): The SROs and SIP Committees
have compiled a series of proposals designed to improve operational
resiliency, strengthen interoperability standards and disaster
recovery capabilities, enhance governance, accountability and
transparency and establish a clear testing framework for the
industry. These proposals set out a process for sharing best
practices, reviewing policies and procedures of all Operating
Committees, and updating technology change procedures, as well as
improving audit and assessment processes.
- Critical
Infrastructure: The SROs have established a pathway to
identify contingencies related to critical infrastructure items
such as essential regulatory messaging (LULD, SSR, Halts), the
open/close of the markets, initial public offerings, DTCC/OCC
outages, singly-listed options and industry testing and
connectivity to exchange disaster recovery facilities.
- Halts/Resumptions: The SROs have agreed to three
core principles for halting the equities and options market
(transparency, limited discretion, and the coordination of
halts/resumptions by the primary markets) and proposed rules and
metrics incorporating these key principles are under consideration
among the SROs.
- Trade
Breaks: The SROs are reconciling trade-break rules among the
exchanges for both equities and options markets. Subsequent changes
will be submitted in a series of rule proposals for public comment
and SEC approval.
- Kill
Switch: Work continues in the equities markets on a
year-long industry effort to reach a consensus on a proposed common
“kill switch” functionality to prevent risk and disruption to the
markets. Likewise, the options exchanges have agreed to each refine
and enhance their existing kill switch functionality. In addition
to kill switches, the options exchanges also agreed to enhance or
develop functionality for price filters, drill-through protections,
and activity-based kick outs.
The self-regulatory organizations have been working
collaboratively in developing these recommendations. We look
forward to continuing dialogue and engagement with the Commission
and the industry as we work collectively to finalize and execute on
these recommendations.
For media inquiries, here is contact information for each
Self-Regulatory Organization:BATS Global MarketsRandy
Williams, 212-378-8522comms@bats.comorBOX ExchangeJanice
Foley, 617-823-5555janifoley@verizon.netorChicago Board Options
ExchangeGail Osten, 312-786-7123osten@cboe.comorChicago
Stock ExchangeDave Herron,
312-663-2270dherron@chx.comorDirect EdgeJames Gorman,
201-942-8234jgorman@directedge.comorFinancial Industry
Regulatory AuthorityGeorge Smaragdis,
202-728-8988George.Smaragdis@finra.orgorInternational Securities
ExchangeMolly McGregor, 212-897-0275mmcgregor@ise.comorMIAX
OptionsDominique Prunetti-Miller,
609-897-1465dprunetti@miami-holdings.comorNational Stock
ExchangeFrancis Corcoran, 202-499 -1843orNASDAQ OMXJoe
Christinat, 646-441-5121Joseph.christinat@nasdaqomx.comorNYSE
EuronextEric Ryan, 212-656-2411eryan@nyx.com
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