FINRA has filed a proposed rule with the Securities and Exchange Commission (“SEC”) that would require associated persons of FINRA member firms who are responsible for the design, development or significant modification of an algorithmic trading strategy to register with FINRA. The proposed rule would also require the registration of persons who are responsible for the supervision of the day-to-day activities of such algorithmic trading strategies.
The rule would require covered persons to pass a qualification examination and register with FINRA as a Securities Trader. By requiring same, FINRA seeks to facilitate compliance with securities regulation obligations by firms engaged in automated trading activities. Further, as registered Securities Traders, individuals registered under the proposed rule must be designated to a registered principal with the authority to carry out supervisory obligations of the firm.