From: Kermit Kubitz |
While the provisions for rental of space to IFUS are generally acceptable, measures to insure avoidance of any manipulation or inappropriate sharing of information or behavior may need to be enhanced. In particular 1. The proposal indicates that names of IFUS traders in this location, 20 Broad Street, will be given to FINRA, the names of NYSE Market brokers in booths nearby should also be provided to FINRA on a periodic, possibly monthly basis, so that any correlated activity can be identified from both sources. 2. While it is asserted that the Russell index products are not subject to likely misuse of shared or overheard information, this is not a bar to such behavior. Periodically there should be audits of any IFUS trading of the Russell index products with flags for sudden movement in volume or trading behavior compared to baseline activity. 3. It may be helpful so as to clearly define the applicable rules, to have signs in the location being utilized for both IFUS and NYSE traders indicating that use of information from other physically co-located markets or traders is prohibited; that the use of manipulative, deceptive, or fraudulent devices is prohibited both by exchange rules and SEC legal requirements , and that monitoring and audit of transactions to identify any violations, as well as self-reporting of violations on use of any data will be required. |