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What is a Regulation SHO bona-fide market maker?

What is a Regulation SHO bona-fide market maker? To summarize and analyze guidance provided by the US Securities and Exchange Commission (“SEC”) on what constitutes “bona-fide market making” for purposes of Regulation SHO’s exception to the locate requirement.Design/methodology/approachExplains SEC guidance on this subject, focusing on statements by the SEC and its staff related to Regulation SHO and SEC enforcement matters, including a recent SEC administrative proceeding providing concrete examples of activity that does not constitute bona-fide market making.FindingsWhile there is still a lot of room for additional SEC guidance on what constitutes bona-fide market making, the SEC has provided some details on the specific type of trading that would not fall within the Regulation SHO exceptions applying to bona-fide market making activities. However, there is still a large gap between the type of activity that most likely falls within the exception and the concrete examples analyzed by the SEC.Originality/valuePractical guidance from experienced securities lawyers that consolidates SEC guidance on the bona-fide market making exception. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Investment Compliance Emerald Publishing

What is a Regulation SHO bona-fide market maker?

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References (9)

Publisher
Emerald Publishing
Copyright
© 2017 Murphy & McGonigle P.C.
ISSN
1528-5812
DOI
10.1108/joic-04-2017-0019
Publisher site
See Article on Publisher Site

Abstract

To summarize and analyze guidance provided by the US Securities and Exchange Commission (“SEC”) on what constitutes “bona-fide market making” for purposes of Regulation SHO’s exception to the locate requirement.Design/methodology/approachExplains SEC guidance on this subject, focusing on statements by the SEC and its staff related to Regulation SHO and SEC enforcement matters, including a recent SEC administrative proceeding providing concrete examples of activity that does not constitute bona-fide market making.FindingsWhile there is still a lot of room for additional SEC guidance on what constitutes bona-fide market making, the SEC has provided some details on the specific type of trading that would not fall within the Regulation SHO exceptions applying to bona-fide market making activities. However, there is still a large gap between the type of activity that most likely falls within the exception and the concrete examples analyzed by the SEC.Originality/valuePractical guidance from experienced securities lawyers that consolidates SEC guidance on the bona-fide market making exception.

Journal

Journal of Investment ComplianceEmerald Publishing

Published: Jul 3, 2017

Keywords: Broker-dealer; US Securities and Exchange Commission (SEC); Bona-fide market making; Regulation SHO

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