SEC Rule Change Would Require High-Frequency Traders To Register With FINRA

On March 25, 2015, the SEC proposed an amendment to Rule 15b9-1 that would require high-frequency trading firms to register with FINRA. According to the SEC, the proposed amendment will better align the scope of Rule 15b9-1 with today's market structure.

Rule 15b9-1, as presently written, exempts certain market participants from the requirement under the Securities Exchange Act that broker-dealers become a member of a registered national securities association. Specifically, Rule 15b9-1 exempts broker-dealers from the membership requirement if they (1) are a member of a national securities exchange, (2) carry no customer accounts, and (3) derive $1,000 or less in gross annual income from securities transactions conducted outside of a national securities exchange of which they are a member (the "de minimis allowance"). Under the current Rule, income derived from trading for the broker-dealer's own account with other broker-dealers does not count against the $1,000