The Monitor: Revamped Just In Time For Spring

Hi everyone! Spring is finally upon us. With that season comes changing markets, changing regulations, and changes from us as well. 

As I mentioned in my letter last month, we decided to shake up The Monitor with a few new regular features. We also asked you what subjects you’d like us to cover, with the top results being changing regulatory policies and crypto assets. We’ll be touching upon some very interesting developments in both of those areas below, as well as sharing some exciting news about our soon-to-be relaunched Best Execution Platform, and our social calendars for April and May. 

As we move further into Q2, it’s likely that trade regulations may shift further as a result of the current administration’s recent tariff announcements.  We believe they present an opportunity for firms to reassess their trading, strengthen their compliance frameworks, and honor their best execution obligations. 

We hope that by sharing some of these insights with you, your business will be empowered to be proactive in the face of big changes ahead.

– Lisa Balter Saacks, President at Trillium Surveyor

Trading Newsbeat

Increased Surveillance in Fixed Income

We all know there’s always been a bit of a lag in fixed income surveillance compared to other asset classes. There are a few reasons for this, such as its lower liquidity, a fragmented market, and tech limitations which made it difficult to handle the volume and complexity of the data needed.

We have seen that FINRA is now taking an increased interest in surveillance for fixed income, meaning that this market will now be far more scrutinized. In fact, FINRA specifically mentioned that increased surveillance would be needed in its 2025 Annual Regulatory Oversight Report, and its Trade Reporting and Compliance Engine (TRACE) is now taking a closer look at trading activity in fixed income trading.

THE IMPACT: We believe that traders and brokers in this space will certainly be under more pressure and scrutiny if FINRA takes a closer look at it, and we could see increased levels of surveillance for fixed income in the coming months.

In our opinion, firms will face a need to develop and implement robust surveillance systems and procedures to monitor for potential violations like manipulative trading and insider trading. FINRA’s greater focus on transaction cost analysis will also mean that players in fixed income will have to search harder for potential best execution failures as well.

Coverage Removed From Low Price Securities

A number of market makers have recently reduced or removed coverage for low-price securities. This is because low-priced securities often have lower trading volumes and wider bid-ask spreads — reducing profitability for financial firms trading in them.

Low-priced securities can also be more volatile and susceptible to manipulation, which means that they are under more scrutiny than ever. Because of this risk, has compliance aimed at reducing market manipulation like money laundering and fraud (such as FINRA Regulatory Notice 21-03) increased the regulatory pressure for traders in this space?

THE IMPACT: We know that reduced coverage makes it more challenging for traders to assess the risks associated with these securities, such as fraud market manipulation, and lack of liquidity. When coverage decreases, it’s harder for compliance officers to monitor trading activity for suspicious patterns and potential violations of anti-manipulation rules.

Meanwhile, ensuring best execution for customer orders in low-priced securities can be difficult even with good coverage due to wider spreads and lower liquidity. Reduced coverage exacerbates this, meaning that compliance officers will have to adopt better monitoring to demonstrate that their firm is fulfilling their obligations to clients.

Products and Services: Countdown to Best Execution

It’s not long until we relaunch our Best Execution platform, which is set to include a significant range of updates, and brand-new features to help firms get a leg-up in the market, while also achieving the best possible results for their clients.

The relaunch of our Best Execution platform comes ahead of the recent revisions made to the SEC’s Rule 605. This regulation was amended in June of 2024, with the aim of enhancing the transparency of aggregate execution quality reported by brokers/dealers. With traders and brokers now required to disclose information on the various categories and sizes of their orders, firms are scrambling to update their metrics and trading data in time for the December 2025 deadline.

However, our Best Execution platform is ideally suited to helping traders review and test their data. It can also help them amend their metrics, and their execution quality statistics in time for the final date.

Company Milestones

Since our Best Execution platform is relaunching so soon, we’re opening up our beta to the public so we can gather important feedback on the tool before August.

So, if you’re interested in seeing what our newly revamped Best Execution tool can do for you then please sign up for our beta here.

Our Social Calendar

The Surveyor team had another busy month in April collaborating with partners and building strategic relationships with other industry leaders in trading and compliance. Here’s a look back at some of the events we attended:

• Rob Cope, A.J. LeGaye, and Kyle Kovacs attended the Security Trader Association New York’s (STANY) Annual Markets Conference & Reception, where they engaged in some thoughtful discussions on the push for 24/7 trading and the increasingly fractured crypto market.  
• Our team also attended the Futures Industry Association’s Law and Compliance Conference, where we spoke to a number of players in the futures and commodities sector. Here’s what we learned:
  • Monitoring is getting serious attention — especially for commodity firms. 
  • Growth in retail trading means new compliance risks, more participants, faster activity, and a harder job for risk teams. 
  • The spot market for Crypto remains highly vulnerable to manipulation, making it more vital for firms to identify wash trades and other manipulations 
  • Legal teams were cautiously optimistic that the U.S. could enact more comprehensive crypto legislation, potentially regarding stablecoin. 

Looking ahead to May: 

• We’ll be heading to D.C. for FINRA’s National Conference to get the latest insights on trending regulatory and compliance topics. Contact our Director of Product, Melissa Watras, to arrange a time to chat at the event.
• We’ll also participate in TradeTech’s buy-side equity conference over in Paris, where we hope to meet some of the key decision-makers in the European equity market. Contact our Director of Sales, AJ LeGaye, to arrange a time to chat at the event.

Let’s Connect!

Do you feel your firm is fully prepared for Rule 605 changes? We’re polling our LinkedIn followers to ask how ready they feel, so please let us know how you feel here.