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Dec 15 2008 - Nov 16 2014Nov 17 2014 onwards

7320. Trade Reporting Participation Requirements

(a) Mandatory Participation for Clearing Agency Members
(1) Participation in the System is mandatory for any member that has an obligation to report an over-the-counter transaction to FINRA. Such participation in the System shall include the reconciliation of all over the counter clearing agency eligible transactions.
(2) Participation in the System shall be conditioned upon the initial and continuing compliance with the following requirements:
(A) execution of, and continuing compliance with, a Participant Application Agreement;
(B) membership in, or maintenance of an effective clearing arrangement with a participant of, a clearing agency registered pursuant to the Exchange Act;
(C) compliance with all applicable rules and operating procedures of FINRA and the SEC;
(D) maintenance of the physical security of the equipment located on the premises of the participant to prevent unauthorized entry of information into the System; and
(E) acceptance and settlement of each trade that the System identifies as having been effected by such participant, or if settlement is to be made through a clearing member, guarantee or the acceptance and settlement of each System identified trade by the clearing member on the regularly scheduled settlement date.
(3) Participation in the System as a Clearing Broker shall be conditioned upon the Clearing Broker's initial and continuing compliance with the following requirements:
(A) execution of, and continuing compliance with, a Participant Application Agreement;
(B) membership in a clearing agency registered pursuant to the Exchange Act;
(C) compliance with all applicable rules and operating procedures of FINRA and the SEC;
(D) maintenance of the physical security of the equipment located on the premises of the Clearing Broker to prevent the unauthorized entry of information into the System; and
(E) acceptance and settlement of each trade that the System identifies as having been effected by itself or any of its correspondents on the regularly scheduled settlement date.
(4) (A) Upon compliance with the conditions specified in subparagraph (B) below, access to and participation in the System shall be granted to the following Non-Member Clearing Organizations:
(i) West Canada Clearing Corporation; and
(ii) The Canadian Depository for Securities.
(B) Non-Member Clearing Organization access to and participation in the System shall be conditioned upon the Organization's initial and continuing compliance with the following requirements:
(i) execution of and continuing compliance with a Non-Member Clearing Organization Participation Application Agreement;
(ii) a Non-Member Clearing Organization shall only have access to the System to operate as a service bureau for its members functioning as Reporting Order Entry Firms, Correspondent Executing Broker-Dealers, Correspondent Executing Brokers, Clearing Broker-Dealers, or Clearing Brokers, as those terms are defined in Rule 7310;
(iii) registration as a clearing agency pursuant to the Exchange Act, membership in a clearing agency registered pursuant to the Exchange Act, or maintenance of an effective clearing arrangement with a registered clearing agency;
(iv) compliance with all applicable rules and operating procedures of FINRA and the SEC;
(v) maintenance of the physical security of the equipment located on the premises of the Non-Member Clearing Organization to prevent the unauthorized entry of information into the System; and
(vi) a Non-Member Clearing Organization may only participate in the System on behalf of its members who have:
a. executed a Non-Member Access Participant Application Agreement and
b. have been in continuing compliance with such agreement.
(C) A Non-Member Clearing Organization may permit its members functioning as Reporting Order Entry Firms to have direct access to the System, provided the member of the Non-Member Clearing Organization complies with the following requirements:
(i) execution of a Non-Member Participant Application Agreement;
(ii) membership in a Non-Member Clearing Organization listed in paragraph (a)(4)(A) above; and
(iii) compliance with paragraph (a)(3)(C) through (E) above.
(D) A Non-Member Clearing Organization may permit its members functioning as Clearing Brokers to have direct access to the System provided the member of the Non-Member Clearing Organization complies with the following requirements:
(i) execution of a Non-Member Participant Application Agreement;
(ii) membership in a Non-Member Clearing Organization listed in paragraph (a)(4)(A) above; and
(iii) compliance with paragraph (a)(3)(C) through (E) above.
(5) Each Participant shall be obligated to inform FINRA of non-compliance with any of the participation requirements set forth above.
(b) Participant Obligations
(1) Access
Upon execution and receipt by FINRA of the Participant Application Agreement, as applicable, a Participant may commence input and validation of trade information in Reportable Securities. Participants may access the service through computer interface or such other service as may be designated by FINRA during the hours of operation specified by FINRA. Prior to such input, all Participants, including those that have trade report information submitted by any third party, must obtain from the System a unique identifying Market Participant Symbol (“MPID”), and use that identifier for trade reporting and audit trail purposes.
(2) System Participant Obligations
(A) Participants shall commence participation in the System by initially contacting the System Operation Center to verify authorization for submitting trade data to the System for Reportable Securities.
(B) A Participant that is a self-clearing firm shall be obligated to accept and clear each trade that the System identifies as having been effected by that Participant.
(C) A Participant that is an Introducing Broker or a Correspondent Executing Broker shall identify its Clearing Broker when it becomes a Participant and notify the System Operation Center if its Clearing Broker is to be changed; this will necessitate execution of a revised Participant Application Agreement.
(D) If at any time a Participant fails to maintain a clearing arrangement, it shall be removed from the System until such time as a clearing arrangement is reestablished and notice of such arrangement, with an amended Reporting Participant Application Agreement, is filed with FINRA.
(3) Clearing Broker Obligations
(A) System Clearing Brokers shall be obligated to accept and clear as a party to the transaction each trade that the System identifies as having been effected by itself or any of its Correspondent Executing Brokers. Clearing Brokers may cease to act as principal for a Correspondent Executing Broker at any time provided that notification has been given to, received and acknowledged by the System Operation Center and affirmative action has been completed by the Center to remove the Clearing Broker from the System for that Correspondent Executing Broker. The Clearing Broker's obligation to accept and clear trades for its correspondents shall not cease prior to the completion of all of the steps detailed in this subparagraph (3).
(B) If at any time a System Clearing Broker fails to maintain a clearing arrangement, it shall be removed from the System until such time as a clearing arrangement is reestablished, and notice of such arrangement, with an amended Participant Application Agreement, is filed with FINRA
Amended by SR-FINRA-2013-050 and SR-FINRA-2014-039 eff. Nov. 17, 2014.
Adopted by SR-FINRA-2008-021.

Selected Notice: 08-57, 14-21.

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