About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

FINRA Bans Spoofing and Layering Practices In Its Markets

Subscribe to our newsletter

The Financial Industry Regulatory Authority (FINRA), the US self-regulatory organization serving the NYSE, Nasdaq and other US-based exchanges, has submitted a proposal to the US Securities and Exchange Commission to sanction trading practices commonly known as “spoofing” and “layering.”

FINRA has proposed adding provisions to Rule 5210 of the US Securities Exchange Act of 1934 allowing the authority to issue cease and desist orders in response to parties who enter multiple limit orders that change supply and demand for a security, and are executed, but then canceled (spoofing), and to parties who narrow spreads of securities by placing orders inside the national best bid and offer (NBBO), then placing orders on the opposite side of the market that execute against market participants who interacted with the first orders inside the NBBO (layering).

In FINRA’s submission to the SEC, the authority stated that it plans to begin implementing its proposal for markets it oversees and for markets it regulates under service agreements, within 30 days of FINRA’s November 15 filing of the proposal with the SEC.

Cease and desist orders may be temporary or permanent, and hearings on specific cases can be held, according to FINRA’s proposal. Those who violate such orders, however, may have their FINRA association or membership canceled, or face disciplinary sanctions, the proposal said.

FINRA’s proposal is similar to provisions already put in place by Nasdaq and the BATS Exchange for their markets.

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: From 24/7 to Event-Driven: Engineering the Next-Generation Exchange Platform

What digital asset and prediction markets are teaching traditional exchanges about availability, agility and time-to-market. New market structures and regulatory changes are forcing exchange operators to rethink the foundations of their technology stacks. Digital asset exchanges, prediction markets and retail-driven platforms have normalised 24/7 trading, continuous availability and rapid product iteration. In contrast, many traditional...

BLOG

Building for a Market That Never Sleeps: Inside LSEG’s Real-Time Data Platform Optimisation

As data volumes surge and markets move toward 24/7 operation, LSEG is rebuilding the infrastructure that underpins its real-time data services – combining hyperscaler capabilities with private-cloud control to deliver scale, speed and resilience for the next generation of capital markets workflows. The forces reshaping real-time data The demands on real-time market data infrastructure are...

EVENT

RegTech Summit London

Now in its 9th year, the RegTech Summit in London will bring together the RegTech ecosystem to explore how the European capital markets financial industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

AI in Capital Markets Handbook 2026

AI adoption in capital markets has moved into a more disciplined phase. The priority is now controlled deployment: where AI can be used safely, where it can deliver measurable value, and how outputs can be governed, monitored and evidenced. The 2026 edition of the AI in Capital Markets Handbook examines how AI is being applied...