Introduction -

As part of its ongoing market structure initiatives related to, among other things, automated trading activities, the Financial Industry Regulatory Authority (FINRA) has issued a proposal that would require the registration of associated persons of FINRA-member firms who are "primarily responsible for the design, development or significant modification of an algorithmic trading strategy." The proposal's scope is broad, and would require various individuals who currently are not subject to a FINRA registration requirement, to pass a qualification examination and register.

Purpose of the Proposed Rule -

FINRA's market structure-related initiatives are aimed at addressing the explosion of automated trading activities—i.e., high-speed and algorithmic trading—in the nation's securities markets by increasing the scope of trading information provided to FINRA, increasing the transparency of such trading activities and requiring employees of member firms engaged in electronic trading to be "trained, educated and accountable" for their role in algorithmic trading strategies.