TRIPLE PLAY
Euroclear is introducing a
single platform for settling
trades—in three phases.

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HOW WALL STREET OPERATES

Volume 22 Number 10 • May 17, 2010

RISK p. 14

Locking Down Customer Records

SIFMA OPS 2010 SPECIAL REPORT - p. 18 Clearing Derivatives • Counting Votes Correctly

SECURITY p. 16

Protecting Critical Code

MARKETS REPORT

BREAKING FROM PAST The nation’s high-speed exchanges—now nearing 50—must learn how to look out for each other. To prevent sudden crashes like the one on May 6, they are pledging to come up with uniform circuit breakers.

FULL STORY ON PAGE 10

Clearer Cooperation Could Have Produced Bigger ‘Pot’ of Lehman Assets for Creditors

By John Hintze

IF CLEARINGHOUSES FOR
derivatives and securities
could have viewed all the
Lehman Brothers assets they
held in one pot, they likely
could have returned millions
of dollars more to creditors
after the investment bank im-
ploded in September 2008.

Brokers Seeing Red Over FINRA’s 30-Day Notice Proposal

By Carol E. Curtis

A PROPOSAL FROM THE Financial Industry Regulatory Authority requiring 30-day written notice of a broad variety of changes has aroused ;erce industry opposition. The grounds: The details about daily business that would be required to be disclosed are overreaching, and reporting them would be a signi;-cant burden on the industry’s operations.

Events that must be reported 30 days prior to the event’s occurrence include changes to clearance activities, or methods of bookkeeping or recordkeeping. Other events include the addition of certain new products or services, the discovery of any condition that could lead to capital, liquidity or operational problems, or changes in key personnel or business relationships with certain a;liates (see list).

“The requirement to report such activity is silly,” says Howard Spindel, senior managing director of Integrated Management Solutions (IMS), a New York ;nancial and compliance consulting ;rm that performs operational and regulatory functions for broker-dealers.

The little-noticed change,
contained in proposed FINRA
Rule 1170, is part of FINRA’s
development of a consoli-
dated, or “harmonized,” rule-
book since taking over in
2007 from its predecessor as
the industry’s own regula-
tor of broker-dealers, NASD,
originally known as the Na-
tional Association of Securi-
ties Dealers. “Harmoniza-
tion” refers to the process of
combining the rules of NASD
with those of NYSE Regula-
tion, which also was folded
into FINRA in 2007.