SIFMA provides comments to the Securities and Exchange Commission (SEC) on proposals to allow participants to attest that “substantially all” orders submitted to the Retail Liquidity Program (RLP) will qualify as “Retail Orders,”  SR-NYSE-2013-08; SR-NYSEMKT-2013-07; SR-BYX-2013-008; and SR-NASDAQ-2013-031. The Programs each create a new class of market participants: Retail Member Organizations (RMOs). In order to qualify as an RMO, a participant is required to submit an attestation to the Exchange that “any” order flow submitted would qualify as a “Retail Order.” These Programs were approved on a pilot basis by the Commission staff acting pursuant to delegated authority.

SIFMA believes that the proposed amendments weakening the standard to allow some non-retail orders represents a material and problematic departure from the Programs originally considered by the Commission.

SIFMA is concerned that the “substantially all” standard proposed by the Exchanges is so vague that it could allow a material amount of non-retail order flow to qualify for the Programs.