SEC Final Rule: Large Trader Reporting

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Dodd-Frank Timeline, Large Trader Reporting, SEC
Effective Date Compliance Date, "Sponsored Access" Compliance Date, Other Bkr-Dlrs
October 3, 2011 November 30, 2012 May 1, 2013

At its July 26, 2011 open meeting, the SEC issued its final rule regarding large trader reporting requirements under the Dodd-Frank Act. According to the rule, large traders will be assigned a unique identification number by the SEC and must provide this number to their broker-dealers. The large traders are required to identify themselves to the SEC and the broker-dealers are required to keep transaction records for each large trader, reporting this data to the Commission if necessary.<ref>SEC Adopts Large Trader Reporting Regime. SEC. Retrieved on July 26, 2011.</ref>

Final Rules

  • Large traders are those market participants that "conduct a substantial amount of trading activity and collect information on their trading."<ref>OPEN MEETING AGENDA: Tuesday, July 26, 2011. SEC. Retrieved on July 26, 2011.</ref>
  • "After it files Form 13H to register with the Commission, the SEC will then assign each large trader a unique large trader identification number (LTID), which will allow the agency to efficiently identify and analyze trading activity by the large trader. A large trader will be required to disclose to its broker-dealers its LTID and highlight all of the accounts at the broker-dealer through which the large trader trades."
  • Broker-dealers are required to maintain and report large trader data and also monitor which customers actually meet the set threshold that defines a "large trader" as to doubly enforce the required large trader identification to the SEC.
  • Transaction data must be ready for reporting the morning after the transaction takes place.<ref>SEC adopts large-trader reporting system. Reuters. Retrieved on July 26, 2011.</ref>

Final rules were added to the Federal Register on August 3, 2011.

Note: On April 20, 2012, the SEC temporarily exempted broker-dealers from compliance by April 30, 2012, as was previously mandated. In order to provide them with additional time to comply with the recordkeeping, reporting, and monitoring requirements of the rule, the commission has extended the compliance date for registered broker-dealers to May 1, 2013, except for certain broker-dealers that are either large traders or have large trader customers that are either broker-dealers,or that trade through a “sponsored access” arrangement, for which the Commission is extending the compliance date to November 30, 2012. The extension of the compliance date will allow broker-dealers additional time to "develop, test, and implement enhancements to their recordkeeping and reporting systems".<ref>Order Temporarily Exempting Broker-Dealers from the Recordkeeping, Reporting, and Monitoring Requirements. SEC. Retrieved on April 23, 2012.</ref>


Background

On April 14, 2010, the SEC proposed a large trader reporting system. Proposed rules were added to the Federal Register on April 23, 2010.<ref>SEC Proposes Large Trader Reporting System. SEC. Retrieved on April 14, 2010.</ref>

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References[edit]

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