NYSE Texas Cracks Down on Sneaky Trading Secrets
Published Date: 5/15/2025
Notice
Summary
NYSE Texas just rolled out a new rule, 11.30, to stop people from using secret, important info unfairly in trading. This affects all traders and firms on the exchange and kicks in right away with no extra fees. It’s a smart move to keep trading fair and square starting May 2, 2025.
Analyzed Economic Effects
5 provisions identified: 1 benefits, 4 costs, 0 mixed.
Exchange requires written insider-use policies
If you are a Participant on NYSE Texas, the new Rule 11.30 requires your firm to establish, maintain, and enforce written policies and procedures reasonably designed to prevent the misuse of material, non-public information. The rule also requires that any Participant or Associated Person who becomes aware of possible misuse must promptly notify the Exchange's Regulatory staff. The rule became operative upon filing on May 2, 2025.
Late filing penalty: $500 per occurrence
Participants for whom the Exchange is the Designated Examining Authority and who must file Form X-17A-5 must also file contemporaneous compliance acknowledgments under Rule 11.30. Any Participant who fails to file a compliance acknowledgment form in a timely manner will be charged a $500.00 late filing fee for each occurrence, and repeated failures may be referred to Enforcement.
Attestations, records, and quarterly account reviews required
Rule 11.30 requires Participants to advise Associated Persons in writing of the prohibition on misuse, obtain signed attestations from Associated Persons, and retain those attestations for at least three years (with the first two years in an easily accessible place). Participants must keep trade confirmations and monthly account statements for accounts where an Associated Person has a direct or indirect interest or makes investment decisions, and review those brokerage accounts at least quarterly to detect possible misuse.
Investor protection and market confidence strengthened
The Exchange states that Rule 11.30 is designed to prevent fraudulent and manipulative acts, promote just and equitable trading, and protect investors and the public interest by setting rules to guard against misuse of material, non-public information. The Exchange and the Commission implemented the rule effective May 2, 2025 to promote market integrity and investor confidence.
Market makers face extra safeguards for listed products
Participants acting as registered Market Makers in products listed under Exchange Rules 5 and 8, and their affiliates, must also establish, maintain, and enforce written policies reasonably designed to prevent misuse of material, non-public information about those products, related components, underlying assets or currencies, indexes, and related derivatives. This additional requirement is stated in Commentary .04 to Rule 11.30.
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