Stay up-to-date with the latest developments in securities law through access to both news and all statutes and regulations. Find relevant corporate filings through a searchable EDGAR database. And...
Oct. 1 — A looming data collection deadline in the SEC's upcoming tick size pilot program is likely to get delayed in order for the agency to give firms more guidance on how to comply, a top agency official said Oct. 1.
The agency approved its pilot in May for certain groups of small-cap stocks to trade at nickel-sized increments, and data collection from exchanges, the Financial Industry Regulatory Authority and some firms is scheduled to begin Nov. 6 (47 SRLR 929, 5/11/15)(88 SLD, 5/7/15)(88 DER, 5/7/15).
“There are certain things that need to happen between now and November,” including for the agency to post frequently asked questions and for self-regulatory organizations to make relevant rule filings, Stephen Luparello, head of theSecurities and Exchange Commission's Division of Trading and Markets, said. “Our expectation is those things will happen very, very soon.”
“Is that going to happen in a time frame quick enough for the firms to do what they need to do to start gathering the data? It seems kind of unlikely,” he said at the annual Security Traders Association Equity Market Structure Conference inWashington.
The pilot program applies to companies with $3 billion or less in market capitalization, provided they also have an average daily trading volume of a million shares or fewer and an average price of at least $2 during the course of the program.
The program will sort eligible securities into four groups, including a control group that will stay at a penny increment. A second group will be quoted in nickels but could trade at any presently allowable increment, and a third group will quote and trade at a nickel increment, subject to certain exceptions.
The fourth group will have nickel quoting and trading, subject to similar exceptions, and also face a “trade-at” requirement.
Data collection was slated to begin in November in order to give the SEC six months' worth of data from program participants before wider tick transactions are to begin on May 6.
The Securities Industry and Financial Markets Association raised concerns in late August that, even then, there was not enough time for stakeholders to get ready for November data collection without the FAQs or SRO filings.
That theme was repeated during the day's panels, and Luparello sought to quell those concerns.
“We’re not going to insist on adherence to a specific date if that date causes either a substantial amount of disruption or gives us data that isn’t the data we want,” Luparello said.
The exchanges and FINRA are still working out what the particular format of data to be collected will be.
FINRA head Richard Ketchum said Oct. 1 that a single reporting methodology has the most appeal, considering that the SRO's Order Audit Trail System is already in place.
“If in the end there are meaningful burdens with the respective firms meeting the OATS approach,” then some compromise will follow, Ketchum said, while on the same panel as Luparello.
Rep. Sean Duffy (R-Wis.), who sponsored a tick pilot bill that passed the House in 2014, spoke at the STA event after Ketchum and Luparello. There also was a stakeholder panel that was largely critical of the initiative.
The crowd of hundreds at the STA event was generally unsupportive of the tick pilot as well, but Duffy urged patience.
“We want to get the data to see what actually works and what doesn’t,” he said.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)