More On Legal & Compliancefrom The Advisor's Professional Library
- The Few and the Proud: Chief Compliance Officers CCOs make significant contributions to success of an RIA, designing and implementing compliance programs that prevent, detect and correct securities law violations. When major compliance problems occur at firms, CCOs will likely receive regulatory consequences.
- The Need for Thorough and Effective Policies and Procedures Whethere an advisor is SEC or state-registered, RIAs must revise their policies and procedures to address significant compliance problems occurring during the year, changes in business arrangements, and regulatory developments.
After meeting with leaders of the equities and options exchanges Thursday regarding Nasdaq’s tech glitch that paralyzed trading on Aug. 22, Securities and Exchange Commission Chairwoman Mary Jo White laid out the next steps that the Financial Industry Regulatory Authority, the Depository Trust and Clearing Corp., and the Options Clearing Corp. have agreed to take.
While White said in statement that the meeting was “very constructive,” she stressed the need for all market participants to work collaboratively — together and with the SEC — to strengthen critical market infrastructure and improve its resilience when technology falls short.
To achieve this goal, White said, she asked those at the meeting “to work constructively with the commission staff as we continue to consider ways to enhance the integrity of market systems. They pledged to do so," she said, and she expects "other market participants will do so as well.”
White said she asked FINRA, DTCC and OCC, with the input of other market participants, “to identify a series of concrete measures designed to address specific areas where the robustness and resilience of market systems can be improved, including the systems that were at the core of last month’s trading interruption. The investing public deserves no less.”
FINRA, DTCC and the OCC, in consultation with other market participants, agreed to take the following steps:
- Provide comprehensive action plans that address the standards necessary to establish highly resilient and robust systems for the securities information processors (SIPs), including testing standards and disclosure protocols.
- Identify and provide assessments of the robustness and resilience of other critical infrastructure systems.
- Provide SIP plan and/or rule amendments addressing the issuance, effectiveness, and communication of regulatory halts.
- Review their rules relating to the trade break process and procedures to reopen trading following a trading halt, and provide amendments to those rules as necessary.
- Provide rule amendments to implement “kill switches” that would allow exchanges to shut down trading in the event of technological failures, and review and consider other potential risk mitigation mechanisms.
Check out tweets about the Nasdaq crash and other recent market events in 10 Best Finance Tweets of the Month: August on ThinkAdvisor.