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Regulation and Compliance > Federal Regulation > SEC

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The Securities and Exchange Commission recently approved new exchange rules for breaking stock trades that deviate so substantially from current market prices that they are considered “clearly erroneous.” The rules would for the first time provide a consistent standard across stock exchanges and reduce uncertainty about what happens to a trade depending on where it is executed, according to the SEC. “Clearly erroneous trades can result from a variety of causes, including human error or computer malfunction. Because the markets today are so fast, automated and interconnected, an erroneous trade on one market can very rapidly trigger a wave of similarly erroneous trades on other markets,” the SEC states. For example, the SEC says, “if the last trade in a stock is $20, and a computer malfunction at one firm causes a series of trades to occur on multiple exchanges at prices exceeding $50, the automated systems of other firms may quickly follow, with erroneous trades rapidly impacting multiple markets and market participants.”

FundQuest Inc.’s new managed account program, called Advisor Gateway, is now available from JP Morgan’s Broker Dealer Services business. Advisor Gateway provides access to FundQuest’s reporting, portfolio modeling, fund selection, and rebalancing tools. Other services include due diligence, training, back-office services, and wholesaling support. The managed account offerings on Advisor Gateway include Unified Managed Accounts, Mutual Fund Portfolios, Income Portfolios, and Separately Managed Accounts. FundQuest also states in a release that the new program offers Advisor Choice, an advisor/client constructed portfolio with various asset types utilizing FundQuest tools including asset allocation and performance reporting. FundQuest has 180 advisory firms as clients and $40 billion in assets under management in its combined U.S. and European operations.

The Securities and Exchange Commission recently approved a proposal from the Municipal Securities Rulemaking Board (MSRB) to shorten the time periods for settlement of syndicate accounts, secondary market trading accounts, and the payment of designations. The amendments are designed to reduce the exposure of members of syndicate and secondary market accounts to potential risks of deterioration in the credit of the syndicate or account manager while the account settlements are pending. The SEC’s decision reduces the deadline in MSRB Rule G-11(i) for the final settlement of an underwriting syndicate or similar account from 60 calendar days to 30 calendar days after the issuer delivers the securities to the syndicate. The amendments also reduce the deadline in MSRB Rule G-11(j) for the payment of designations from 30 calendar days to 10 calendar days after bond closing and require co-managers to provide syndicate managers with their designations within two business days after bond closing. The SEC approval also reduces the deadline in MSRB Rule G-12(i) for settlement of secondary market trading accounts from 60 calendar days to 30 calendar days following the date the securities have been delivered to the account members.


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