SEC Delays Effectiveness of Large Trader Reporting for Some Broker-Dealers

The SEC’s “large trader” rules that apply to clearing firms and certain other firms will kick in this November. Thanks to a recent SEC release, some firms are getting a two-year compliance reprieve, but they must develop the procedures and systems for reporting large trader activity within those two years.

The SEC adopted Rule 13h-1 on July 27, 2011, with the goal of enabling the SEC to assess the impact of large trader activity on the securities markets and to support its investigative and enforcement activities. In brief, Rule 13h-1 requires a large trader – defined as a person who exercises investment discretion over one or more accounts, and whose transactions in NMS (national market system) securities equal or exceed 2 million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month – to identify itself to the SEC and file certain information on Form 13H. The SEC then assigns the trader a large trader identification number (LTID).

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Topics:  Broker-Dealer, Compliance, Delays, Enforcement, Filing Requirements, Larger Participant, New Regulations, NMS Plan, Reporting Requirements, SEC

Published In: Finance & Banking Updates, Securities Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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