The Financial Industry Regulatory Authority (FINRA) has extended its surveillance to 99% of US equities trading after forming an agreement with exchange operator BATS Global Markets.
The regulatory service agreement means FINRA will aggregate trading data from BATS’ four order books alongside other US markets including Nasdaq and the New York Stock Exchange (NYSE) to monitor abusive trading conduct.
In a statement, FINRA said the agreement means the regulator has extended its coverage from 90% of US equities trading to 99%, which would further strengthen its efforts to maintain the integrity of markets.
“FINRA’s comprehensive cross-market surveillance patterns will soon cover nearly 100 percent of the listed equities market. With this agreement, we will be better positioned to fulfill our mission of protecting investors by detecting and pursuing cross-market abuses and identifying new threats to the integrity of our markets,” said Thomas Gira, executive vice president, market regulation for FINRA.
The BATS exchanges will be included in the regulator’s surveillance activities from Q1 2015, while FINRA will perform examination services on behalf of BATS beginning immediately.
A merger between BATS and former rival Direct Edge was finalised this week, giving the combined entity over 20% of market share in US equities trading, second only to NYSE.