Buy-side Perspectives Issue 4 - Page 23

FINRA targets market abuse
US regulator the Financial Industry Regulatory Authority has released report cards that are intended to help financial institutions recognise and prevent abusive trading strategies such as layering and spoofing . When FINRA spots suspicious activity that could be layering or spoofing , it sends the crossmarket equities supervision report cards to financial institutions that may have been affected . In addition , the selected firms will be able to see a summary of identified market activity and trends in trading over the previous six months . “[ The reports ] indicate potential problems that need to be reviewed ,” said FINRA . Market abuse has been a hot
topic ever since the flash crash of May 2010 , in which $ 1 trillion was temporarily wiped off the value of the US stock market . In the aftermath of that incident , as well as other market crashes such as the Knight Capital disaster of 2012 in which $ 440 million was lost in three minutes , spoofing and layering were banned . However , a number of other potentially abusive strategies exist such as quote- stuffing , smoking and many others , all of which essentially seek to exploit markets using dubious behaviour to create an advantage for an individual trader or institution . FINRA added in a statement that it would not hesitate to take enforcement action against individuals or firms that are found guilty of market abuse .
Council of the European Union agrees final delay to MiFID II
Following a European Commission proposal in February to delay the MiFID II legislation by one year , the Council of the European Union has agreed that MiFID II should now be delayed until January 2018 , instead of January 2017 as previously planned . The decision was published by the Council on 13 May , in a letter which explained the background to the decision as follows :
1 . On 10 February 2016 , the Commission transmitted to the Council the above mentioned proposals to amend Directive 2014 / 65 / EU ( MiFID 2 ) and Regulation ( EU ) 600 / 2014 ( MiFIR ) 1 . The main purpose of this legislative package is to extend by one year the date of application and certain other dates contained in MiFID 2 and MiFIR . 2 . The European Central Bank adopted its opinion on 29 April 20162 . The opinion of the European Economic and Social Committee is still pending . The reports of the European Parliament were adopted on 7 April 2016 by the ECON Committee . 3 . The Council agreed on a negotiating mandate on the above mentioned proposals at the level of Coreper on 28 April 2016.3 . On that basis , the Presidency has conducted negotiations with the European Parliament and the Commission with a view to a first reading agreement . 4 . On 2 May 2016 - and following the technical work thereafter - a provisional agreement was reached which resulted in the final compromise texts as set out in ADD 1 and ADD 2 to this note . 5 . Against this background the Permanent Representatives Committee ( Part 2 ) is invited to :
a ) approve the final compromise regarding the proposal for a Directive of the European Parliament and of the Council amending Directive 2014 / 65 / EU on markets in financial instruments as regards certain dates and the proposal for a Regulation of the European Parliament and of the Council amending Regulation ( EU ) No 600 / 2014 on markets in financial instruments , Regulation ( EU ) No 596 / 2014 on market abuse and Regulation ( EU ) No 909 / 2014 on improving securities settlement in the European Union and on central securities depositories as regards certain dates , and
b ) confirm that the Presidency can indicate to the European Parliament that , should the European Parliament adopt its position at first reading as regards the above mentioned proposals , as set out in ADD 1 and ADD 2 to this note , subject , if necessary , to revision of the texts by the legal linguists of both institutions , the Council would approve the European Parliament ’ s position and the Acts shall be adopted in the wording which corresponds to the European Parliament ’ s position .
June 2016 www . buysideintel . com
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FINRA targets market abuse US regulator the Financial Industry Regulatory Authority has released report cards that are intended to help financial institutions recognise and prevent abusive trading strategies such as layering and spoofing. When FINRA spots suspicious activity that could be layering or spoofing, it sends the crossmarket equities supervision report cards to financial institutions that may have been affected. In addition, the selected firms will be able to see a summary of identified market activity and trends in trading over the previous six months. “[The reports] indicate potential problems that need to be reviewed,” said FINRA. Market abuse has been a hot topic ever since the flash crash of May 2010, in which $1 trillion was temporarily wiped off the value of the US stock market. In the aftermath of that incident, as well as other market crashes such as the Knight Capital disaster of 2012 in which $440 million was lost in three minutes, spoofing and layering were banned. However, a number of other potentially abusive strategies exist such as quote- stuffing, smoking and many others, all of which essentially seek to exploit markets using dubious behaviour to create an advantage for an individual trader or institution. FINRA added in a statement that it would not hesitate to take enforcement action against individuals or firms that are found guilty of market abuse. Council of the European Union agrees final delay to MiFID II Following a European Commission proposal in February to delay the MiFID II legislation by one year, the Council of the European Union has agreed that MiFID II should now be delayed until January 2018, instead of January 2017 as previously planned. The decision was published by the Council on 13 May, in a letter which explained the background to the decision as follows: 1. On 10 February 2016, the Commission transmitted to the Council the above mentioned proposals to amend Directive 2014/65/EU (MiFID 2) and Regulation (EU) 600/2014 (MiFIR)1. The main purpose of this legislative package is to extend by one year the date of application and certain other dates contained in MiFID 2 and MiFIR. 2. The European Central Bank adopted its opinion on H\[ M H[[ۈوB]\X[XۛZX[X[[Z]YH\[[[ˈH\ܝوH]\X[\X[Y[\HYYۈ \[ MHHPӈ[Z]YKˈH[[YܙYYۈHYX][X[]HۈHXݙHY[[ۙY[˜]H][وܙ\\ۈ \[ M ۈ]\\H\Y[H\ۙXYYX][ۜ]H]\X[\X[Y[[H[Z\[ۈ]HY]H\XY[YܙY[Y[ ۈ X^H M H[[HXX[ܚ\XY\ HHݚ\[ۘ[YܙY[Y[\XXYX\[Y[H[[\Z\H^\]][Q H[Q \KKYZ[\Xܛ[H\X[[\\[]]\[Z]YH \ H\[]Y΂JH\ݙHH[[\Z\HY\[H[܈H\X]HوH]\X[\X[Y[[وH[[[Y[[\X]H M ͍KUHۈX\][[[X[[[Y[\Y\\Z[]\[H[܈HY[][ۈوH]\X[\X[Y[[وH[[[Y[[Y[][ۈ UJH ̌ MۈX\][[[X[[[Y[Y[][ۈ UJH NM̌ MۈX\]X\H[Y[][ۈ UJBLǨ Mۈ[\ݚ[X\]Y\][Y[[H]\X[[[ۈ[ۈ[[X\]Y\\]ܚY\\Y\\Z[]\[Hۙ\H]H\Y[H[[X]HH]\X[\X[Y[] [B]\X[\X[Y[Y]][ۈ]\XY[\Y\HXݙHY[[ۙY[\]][Q H[Q \KXX YX\\K]\[ۈقH^HHY[[Z\و[]][ۜH[[[\ݙHH]\X[\X[Y[8&\][ۈ[HX[HYY[Hܙ[Xܜ\ۙH]\X[\X[Y[8&\][ۋ[H M˘^\YZ[[ B‚