The Futures Industry Association Principal Traders Group (“FIA PTG”) comments on the Financial Industry Regulatory Authority, Inc.’s (“FINRA”) proposal to add supplementary material to FINRA Rule 5210 (Publication of Transactions and Quotations) (“Proposal”). The Proposal, as amended, would provide that securities transactions resulting from orders that originate from unrelated algorithms or separate and distinct trading strategies within the same firm would generally be considered bona fide transactions for purposes of Rule 5210. The Proposal would establish a presumption that algorithms or trading strategies within the most discrete unit of an effective system of internal controls are “related” and require FINRA members to have policies and procedures that are reasonably designed to review their trading activity for, and prevent, a pattern or practice of self-trades resulting from orders originating from a single or related algorithms or trading strategies.
