Lisa B. Saacks is President, Trillium Surveyor.
What were the key theme(s) for your business in 2024?
The key theme for our business in 2024 was navigating the complexities of evolving market conditions to ensure traders operated in a fair, transparent, and efficient environment.
The expansion of overnight trading presented unique challenges, particularly around managing risks associated with low liquidity and potential market disruptions. For traders, this underscored the importance of maintaining dynamic and adaptable surveillance thresholds to keep pace with the rapidly shifting market landscape.
Another critical focus was addressing the risks posed by low-price, low-volume securities, which drew heightened regulatory scrutiny due to their vulnerability to manipulative schemes like pump-and-dump tactics. With a notable increase in enforcement actions against firms failing to monitor trading in these securities, the need for robust, proactive trade surveillance became a top priority for ensuring compliance and maintaining market integrity.
More broadly, the regulatory environment has evolved across asset classes, and we received more questions than ever on how our trade surveillance and reporting solutions can elevate the capabilities of internal compliance teams. With comprehensive detection filters, full depth-of-book market data, and new self-service features, the Surveyor platform offers a robust set of tools for effective risk mitigation. In addition to ensuring their compliance, these capabilities enabled our clients to adopt new asset classes and strategies with minimal disruption to existing compliance workflows.
What was the highlight of 2024?
The SEC’s adoption of amendments to Rule 605 of Regulation NMS in March was an important regulatory action this year. This update was aimed at enhancing transparency in order execution for NMS stocks, effective as of June 14, 2024, and with a compliance deadline of December 14, 2025.
The amendments brought significant updates, including the expansion of reporting requirements to include broker-dealers managing 100,000 or more customer accounts. This broadens the scope of entities responsible for disclosing execution quality. Additionally, the definition of “covered orders” was revised to encompass orders submitted outside regular trading hours, those with stop prices, and non-exempt short sale orders, ensuring more comprehensive reporting.
The amendments also introduced order categorization based on notional dollar value and order type — fractional shares, odd lots, or round lots — enhancing the accuracy of order size representation. Moreover, new execution quality metrics, such as average effective over quoted spread and size improvement statistics, were introduced to provide deeper insights into execution quality.
Finally, the new requirement for firms to provide publicly accessible summary reports on execution quality is another move toward greater transparency, empowering investors to make informed comparisons.
What are your expectations for 2025?
We anticipate that heading into 2025, the crypto market is poised to be a high-volume, high-volatility environment. To enable traders to operate effectively in this dynamic space, robust trade surveillance is essential. We’ve recently partnered with Kaiko, which provides high-quality crypto market data. Additionally, the expansion of our coverage in Europe reflects our dedication to providing comprehensive tools that address the unique needs of both traders and investors.
Similarly, we’ve observed a growing regulatory focus on non-equity asset classes, particularly fixed income, prompting us to prioritize enhancements to our surveillance capabilities in these markets. Other areas of focus include expanding our best execution offerings and providing targeted support for RIAs and buyside firms—two groups that are navigating heightened regulatory scrutiny and an increasingly complex trading environment.
Within the wider regulatory landscape, we foresee changes poised to deeply influence market participants, with a particular emphasis on enhancing oversight and addressing the challenges of dynamic and evolving work environments. Additionally, FINRA’s proposed fee increases for broker-dealers, scheduled to phase in over five years starting in 2025 through 2029. While most changes will take effect in 2026, the initiative underscores FINRA’s commitment to enhancing its regulatory and oversight capabilities by securing additional financial resources.
