Dear kind sirs and madams and experts and professionals of Finra:
I am an individual investor, no doubt many who are concerned with Regulatory Notice 26-15 related to Rule 5310.
I'd like to see more protection for best execution of retail orders, not less.
Given that most market activity now appears in dark pools, and the public markets are beginning to falter at actually discovery best execution price, I can't understand why FINRA would be relaxing rule 611, and generally seems to be quite lax related to enforcement of other rules around naked short selling, dark pools, and other common industry practices that seem entirely targeted towards concentration of wealth against the concepts of free markets and open price discovery.
So please, make the rules just a bit stronger, so those of us retail folks who still have the stomach to participate in our free markets can continue to do so. I've sure you've seen this list before, and I generally believe this to be a sort of bare minimum of what you can do to try and keep the markets from being dark-pooled into obsolescence.
(1) order-by-order review for all non-institutional orders, replacing aggregate review for retail flow;
(2) an objective price improvement floor for conflicted retail executions, midpoint or better at a one-tick spread, a full tick where wider;
(3) execution quality reported by routing broker, not just in aggregate;
(4) review of routing inputs, not only outputs, since a firm can manufacture the outcomes it reviews;
(5) a bar on relying under .09(c) on the review of a firm that pays for the flow or executes it as principal;
(6) a statement that blanket "not held" designations for retail orders violate Rule 5310;
(7) periodic examiner access to the routing audit trail, plus annual publication of Rule 5310 examination and restitution figures;
(8) a standardized examination module;
(9) an enforcement action on the RN 21-23 theory, unused since 2021;
(10) quarterly peer benchmarking with referral of persistent outliers to Enforcement;
(11) take conflicted firms and firms that are the subject of enforcement actions off of the Board of Governors; and
(12) make a named person accountable for oversight of best execution and customer order routing.
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Greg Linder Comment On Regulatory Notice 26-15
Dear kind sirs and madams and experts and professionals of Finra:
I am an individual investor, no doubt many who are concerned with Regulatory Notice 26-15 related to Rule 5310.
I'd like to see more protection for best execution of retail orders, not less.
Given that most market activity now appears in dark pools, and the public markets are beginning to falter at actually discovery best execution price, I can't understand why FINRA would be relaxing rule 611, and generally seems to be quite lax related to enforcement of other rules around naked short selling, dark pools, and other common industry practices that seem entirely targeted towards concentration of wealth against the concepts of free markets and open price discovery.
So please, make the rules just a bit stronger, so those of us retail folks who still have the stomach to participate in our free markets can continue to do so. I've sure you've seen this list before, and I generally believe this to be a sort of bare minimum of what you can do to try and keep the markets from being dark-pooled into obsolescence.
(1) order-by-order review for all non-institutional orders, replacing aggregate review for retail flow;
(2) an objective price improvement floor for conflicted retail executions, midpoint or better at a one-tick spread, a full tick where wider;
(3) execution quality reported by routing broker, not just in aggregate;
(4) review of routing inputs, not only outputs, since a firm can manufacture the outcomes it reviews;
(5) a bar on relying under .09(c) on the review of a firm that pays for the flow or executes it as principal;
(6) a statement that blanket "not held" designations for retail orders violate Rule 5310;
(7) periodic examiner access to the routing audit trail, plus annual publication of Rule 5310 examination and restitution figures;
(8) a standardized examination module;
(9) an enforcement action on the RN 21-23 theory, unused since 2021;
(10) quarterly peer benchmarking with referral of persistent outliers to Enforcement;
(11) take conflicted firms and firms that are the subject of enforcement actions off of the Board of Governors; and
(12) make a named person accountable for oversight of best execution and customer order routing.