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FINRA moves towards tighter timing requirements

March 11th 2016 · 1 min read · finra, regulation
By Victor Yodaiken

The Board of the Nederlandsche Overzee Trust Maatschappij, Amsterdam, sitting for 1914-1919 The Board of the Nederlandsche Overzee Trust Maatschappij, Amsterdam, sitting for 1914-1919 (Het Bestuur van de Nederlandsche Overzee Trust Maatschappij te Amsterdam in de jaren 1914-1919) by Antoon van Welie (Public Domain, Source)

Of the five commenters that supported tightening clock synchronization requirements at least to some extent, all agreed that a millisecond standard is necessary given the speed of trading in today’s markets. For example, according to FSMLabs, FINRA’s proposal is “timely and necessary” because “[w]ide use of electronic trading systems and proliferation of trading venues make it impossible to understand market operation or to manage risks without precise and reliable time information.”

From what we are hearing from our customers, the FINRA rule may have little effect because for many firms, the currently tougher MiFID II regulations are going to apply to world-wide operations.

We are interested in hearing from firms that find the FINRA rule burdensome, because in many cases they have been misinformed about what technology is needed. This regulation is easy, but the trend to towards tighter regulation.

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