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FIA PTG raises concerns about Nasdaq PHILX Intellicator

FIA PTG raises concerns about Nasdaq PHILX Intellicator

19 December 2017 2:15pm EST

FIA PTG sent comments to the SEC today raising concerns with a proposal from NASDAQ PHLX LLC  to introduce the Intellicator Analytical Tool. 

FIA PTG had particular concerns with a provision in the proposals that reads, “A purchaser of Single-Factor Analytic Bundles may, under certain circumstances, be able to reverse-engineer factor calculations to obtain transaction-specific information not otherwise available on the Exchange's data feeds…Such information may be useful in identifying the investment strategies of particular customer categories.”

FIA PTG echoed previous comments from SIFMA  that question how a product that can be used to reverse engineer proprietary client identifying data is consistent with the Securities Exchange Act of 1934.  FIA PTG also shares SIFMA’s concerns about the blurring of roles between broker-dealers and exchanges.

"This is not the first time we have seen the boundaries of the exchange role pushed in recent exchange proposals, and believe this is something the Commission should monitor closely," the letter reads. "Accordingly, we respectfully urge the Commission to disapprove this Proposal."

The full letter is available here. 

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2017-12-19_SEC_NASDAQ_PHLX_Intellicator.pdf (258.89 KB)

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