FINRA Manual: Contents
|View Whole Section||Text only||Print Manager||Link|
00-45 NASD Announces Changes To SEC Rule 15c3-3 Extension Request Reason Codes (Correction: On p. 1, the 2nd para under Key Features should read: Under SEC Rule 15c3-3 Rule Type d2, d3 and h, entry of Issue Symbol or CUSIP is required)
Correction - On page 1, the second paragraph under subhead Key Features should read: Under SEC Rule 15c3-3 Rule Type d2, d3 and h, the entry of either Issue Symbol or CUSIP will be required.
SEC Rule 15c3-3 Reason Codes
Effective Date: July 10, 2000
Legal & Compliance
The National Association of Securities Dealers, Inc. (NASD®) is enhancing its Extension Request Reason Codes regarding Securities and Exchange Commission (SEC) Rule 15c3-3 (the Rule). The changes to the reason codes will allow firms to request extensions of time pursuant to paragraphs (d)(2), (d)(3), and (h) of the Rule. The changes will take effect on July 10, 2000.
The chart in Attachment A outlines the current reason codes to be used for extension requests made pursuant to paragraph (m) of the Rule, i.e., reason codes 040 to 052, as well as the new reason codes 070 to 078, and 080 to be used for extension requests pursuant to paragraphs (d)(2), (d)(3), and (h).
Questions regarding this Notice to Members may be directed to Susan DeMando, Director, Member Regulation, NASD Regulation, Inc. (NASD RegulationSM) at (202) 728-8411.
Paragraph (m) of the Rule requires that if a security sold long by a customer has not been delivered within 10 business days after the settlement date, the broker/dealer must either buy the customer in or apply for and receive an extension from its designated examining authority.
Paragraph (d)(2) requires that when a broker/dealer has a possession and control requirement relative to a security, and the firm has failed to receive that security for more than 30 calendar days, that the broker/dealer must buy-in the security or obtain an extension. Paragraph (d)(3) requires a buy-in or extension for securities that are receivable due to a stock dividend receivable, stock split, or similar action for more than 45 calendar days. Finally, paragraph (h) requires that short security differences not resolved within 45 days of discovery be bought in or the broker/dealer must obtain an extension of time.
Following are key features of the new reason codes:
- Under the Rule, reason codes have been added to be applied with Rule Type d2, d3, and h. The reason codes 070, 071, 072, 073, 074, 075, 076, 077, 078, and 080 are to be used for Type d2, d3, and h extension requests. The reason codes will be effective starting July 10, 2000.
- For Rule Type d2, d3, and h, the entry of both the Issue Symbol and CUSIP number will be mandatory.
|SEC Rule 15c3-3 Extension Request Reason Codes|
|Reason Code||Reason Text||Extension Type||Days Permitted||Limit of 9 per Customer||Limit per Reason Code||Final Reason Code||NASD Only||Business Or Calendar Days|
|040||Security In Transit||m||14||N||2||Y||N||C|
|041||Death Of Seller||m||14||Y||2||Y||N||C|
|042||Can't Buy In, Sec Short Supply||m||14||N||5||Y||N||C|
|043||Dividend Sold Before Payable Date||m||14||Y||2||Y||N||C|
|044||Still In Foreign Deposit||m||14||Y||2||Y||N||C|
|045||Sec Exchange Or Merger||m||14||Y||2||Y||N||C|
|046||Strike Or Xmas||m||14||N||0||N||Y||C|
|047||Coming From Another Broker||m||14||Y||2||Y||N||C|
|048||Customer III Or Hospitalized||m||14||Y||2||Y||N||C|
|051||Acts Of God||m||14||N||0||N||Y||C|
|070||Security In Transfer||d2, d3, h||14||N/A||2||Y||N||C|
|071||Security In Mail||d2, d3, h||7||N/A||1||Y||N||C|
|072||Buy-in Issued||d2, d3, h||14||N/A||2||Y||N||C|
|073||Unable To Buy-in||d2, d3, h||14||N/A||2||Y||N||C|
|074||Security At Foreign Depository||d2, d3, h||14||N/A||2||Y||N||C|
|075||Merger, Exchange, Or Reorganization||d2, d3, h||14||N/A||2||Y||N||C|
|076||Mutual Fund||d2, d3, h||14||N/A||2||Y||N||C|
|077||SRO Halted Trading Or Buy-in Privilege||d2, d2, h||14||N/A||5||Y||N||C|
|078||Lost Certificate||d2, d3, h||30||N/A||5||Y||N||C|
|080||Other||d2, d3 h||14||N/A||0||N||Y||C|