Customer Notices FINRA Rule 5320 – Prohibition Against Trading Ahead of Customer Orders
On September 12, 2011, FINRA adopted Rule 5320, which consolidates the previous customer order protection rules and replaces existing FINRA customer limit and market order protection rules, NYSE Rule 92, and other similar exchange rules.
Rule 5320 generally prohibits a member firm that accepts and holds a customer order from trading a security on the same side of the market for its own account at a price that would satisfy the customer order, unless it immediately executes the customer order up to the size of and at an equal or better price than it traded for its own account. Large orders (10,000 shares or more and $100,000 notional or more) and orders from institutional clients are exempted from Rule 5320. Consistent with existing regulatory guidance, not-held orders are outside of the scope of the rule.
Credit Suisse Securities (USA) LLC ("CSSU") maintains internal controls known as information barriers between its trading units. The information barriers are designed to prevent one trading unit from having knowledge of customer orders held by a different trading unit. With these barriers in place, one trading unit may hold a customer order while another trading unit, including the market making trading unit, executes an order for a Firm account that would satisy the customer order.
If you have any questions, please contact your CSSU representative.