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: Enhancing trader efficiency with interoperability – Innovative solutions for automated and streamlined trader desktop and workflows

Traders today are expected to navigate increasingly complex markets using workflows that often lag behind the pace of change. Disconnected systems, manual processes, and fragmented user experiences create hidden inefficiencies that directly impact performance and risk management. Firms that can streamline and modernise the trader desktop are gaining a tangible edge – both in speed...

BLOG

The Digital Last Mile: Reimagining Trader Workflows for the AI Era

As trading desks evolve, firms are turning to AI, interoperability, and modern technology platforms to create smarter, more connected environments that reduce friction for traders, enhance decision-making, and allow users to interact seamlessly with data and tools. However, one of the biggest hurdles they face is the sheer weight of the past. Decades of bespoke...

EVENT

Data Management Summit London

Now in its 16th year, the Data Management Summit (DMS) in London brings together the European capital markets enterprise data management community, to explore how data strategy is evolving to drive business outcomes and speed to market in changing times.

GUIDE

Solvency II Data Management Handbook

Want to get a handle on Solvency II and what it means for data management? Need to make sure you have all the bases covered for the looming January 2016 deadline? Our Solvency II Data Management Handbook is now available for free download to help you. This Handbook is the ultimate guide to all things...