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

Upcoming Webinar: Navigating the Build vs Buy Dilemma: Cloud Strategies for Accelerating Quantitative Research

Date: 20 May 2026 Time: 10:00am ET / 3:00pm London / 4:00pm CET Duration: 50 minutes For many quantitative trading firms and asset managers, building a self-provisioned historical market data environment remains one of the most time-consuming and resource-intensive steps in establishing a new research capability. Sourcing data, normalising symbologies, handling corporate actions and maintaining...

BLOG

Why Do We Disagree? How AI Solves One of Post-Trade’s Most Persistent Challenges

By Carl Thornberg, head of optimisation and analytics technology, OSTTRA. In post-trade operations, most problems are not caused by outright errors, they are caused by ambiguity. Trades that look different but are not wrong. Valuations that diverge for valid reasons. Numbers that do not line up, even though nothing has actually gone awry. At scale,...

EVENT

RepRisk Sustainability Breakfast Roundtable London

The London sustainability breakfast is part of the global roundtable thought leadership event series hosted by RepRisk in key markets, including, New York, Toronto, London, Frankfurt, Oslo, Copenhagen, Stockholm, Hong Kong and Singapore in 2026.

GUIDE

The Data Management Implications of Solvency II

This special report accompanies a webinar we held on the popular topic of The Data Management Implications of Solvency II, discussing the data implications for asset managers and their custodians and asset servicers. You can register here to get immediate access to the Special Report.