The Real DTCC Discussion

[Howzitgoing]

MM's trade for their own piggy banks.

Fortunately they also provide bona-fide market making with enough regulatory oversight, but Knight, for ex., is a case study in proprietary trading.

Forbes: The Jersey City, N.J. firm is in the business of buying and selling for itself and for its clients just about any security that trades: stocks, bonds, options, futures, foreign currency and derivatives.

In fact, in 2009 the company was having so much fun, it got out of the asset management business to focus on trading (Forbes again).

BTW, this just in.

FINRA Disciplinary Actions_Oct 2012.pdf

Partial list. Firm names withheld here only for sake of brevity.

... short interest position reports to FINRA that were incorrect and also failed to report short interest positions.

... failed to submit proprietary orders in non-market making securities to OATS, failed to submit the correct account type code “E” to OATS, and failed to submit the correct order receipt time to OATS.

... firm failed to close out fails to deliver resulting from sale transactions in its proprietary accounts ...

... fail-to-deliver positions at a registered clearing agency in equity securities that resulted from short sales and long sales, and did not close the fail-to-deliver positions by purchasing securities of like kind and quantity within the time frame SEC rules prescribed.

... fail-to-deliver positions at a registered clearing agency in threshold securities ...

[More]

Aaarghhh. And that's just for one month.