FINRA proposes requiring registration of associated persons who develop algorithmic trading strategies

• Published in: The journal of investment compliance Vol. 16; no. 3; pp. 33 - 36
• Main Authors: Angstadt, Janet M, Foley, Michael T, Pazzol, Ross, Van De Graaff, James D
• Format: Journal Article
• Language: English
• Published: Emerald Group Publishing Limited 07.09.2015
• Subjects: Accounting & Finance; Financial investment/markets; Algorithmic trading; Automated trading; Broker-dealer; Registration; Financial Industry Regulatory Authority (FINRA)
• ISSN: 1528-5812; 1758-7476
• DOI: 10.1108/JOIC-06-2015-0042

Purpose – To analyze FINRA’s proposal that would require registration with FINRA of associated persons of FINRA-member firms who are primarily responsible for the design, development or significant modification of an algorithmic trading strategy. Design/methodology/approach – This article discusses the rationale and details of the proposed requirements. Findings – If adopted in its current form, the proposed rule-making, particularly when combined with the SEC’s proposed amendments to Rule 15b9-1 under the Securities and Exchange Act, would result in many various individuals who currently are not subject to a FINRA registration requirement, to pass a qualification examination and register. Originality/value – This article contains valuable information about important FINRA rule making activity.