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  • 6600. OTC REPORTING FACILITY

    • 6610. General

      (a) Members are required to report transactions (other than transactions executed on or through an exchange) in OTC Equity Securities, including secondary market transactions in non-exchange-listed Direct Participation Program securities, and Restricted Equity Securities to the OTC Reporting Facility in compliance with the Rule 6600 and 7300 Series, as well as all other applicable rules and regulations.
      (b) Trading Information for OTC Transactions in OTC Equity Securities Executed Outside of Alternative Trading Systems
      (1) FINRA will publish on its public web site the Trading Information for each member with the trade reporting obligation under Rule 6622(b) on the following timeframes:
      (A) no earlier than four weeks following the end of the Trading Information week, Trading Information for OTC Equity Securities; and
      (B) no earlier than one month following the end of the Trading Information month, aggregate volume totals across all OTC Equity Securities.
      (2) Published Trading Information will be presented on FINRA's web site as follows:
      (A) Trading Information will be aggregated for all Market Participant Identifiers (MPIDs) used by a single member (excluding, if applicable, any MPIDs used by the member for reporting trades executed in its alternative trading system).
      (B) Trading Information will be aggregated for members that have executed on average fewer than 200 transactions per day across all OTC Equity Securities during the applicable Trading Information period.
      (C) Trading Information will be aggregated for members that have executed on average fewer than 200 transactions per day in an OTC Equity Security during the applicable Trading Information period.
      (3) For purposes of this paragraph (b), "Trading Information" includes:
      (A) the number of shares of an OTC Equity Security executed by the member with the trade reporting obligation under Rule 6622(b) and reported to FINRA;
      (B) the number of trades in an OTC Equity Security executed by the member with the trade reporting obligation under Rule 6622(b) and reported to FINRA.
      "Trading Information" for purposes of this paragraph (b) shall not include any ATS Trading Information, as that term is defined in paragraph (c)(3).
      (c) Trading Information for OTC Transactions in OTC Equity Securities Executed on Alternative Trading Systems
      (1) FINRA will publish on its public web site the aggregate weekly ATS Trading Information for each alternative trading system with the trade reporting obligation under Rules 6622(b) no earlier than four weeks following the end of the ATS Trading Information week,
      (2) For purposes of this paragraph (c), "ATS Trading Information" includes:
      (A) the number of shares of an OTC Equity Security executed on an alternative trading system with the trade reporting obligation under Rule 6622(b) and reported to FINRA; and
      (B) the number of trades in an OTC Equity Security executed on an alternative trading system with the trade reporting obligation under Rule 6622(b) and reported to FINRA.
      Amended by SR-FINRA-2016-002 eff. Oct. 3, 2016.
      Amended by SR-FINRA-2015-020 and SR-FINRA-2016-002 eff. Apr. 2, 2016.
      Amended by SR-FINRA-2016-002 eff. Feb. 9, 2016.
      Amended by SR-FINRA-2010-051 eff. Nov. 1, 2010.
      Amended by SR-FINRA-2009-061 eff. Nov. 1, 2010.
      Amended by SR-FINRA-2010-003 eff. June 28, 2010.
      Adopted by SR-FINRA-2008-021 eff. Dec. 15, 2008.

      Selected Notices: 08-57, 10-26, 10-24, 15-48, 16-14.

    • 6620. Reporting Transactions in OTC Equity Securities and Restricted Equity Securities

      • 6621. Definitions

        Terms used in this Rule 6620 Series shall have the same meanings as defined in Rule 6420.
        Adopted by SR-FINRA-2008-021.

        Selected Notice: 08-57.

      • 6622. Transaction Reporting

        (a) When and How Transactions are Reported
        (1) OTC Reporting Facility Participants shall, as soon as practicable but no later than 10 seconds after execution, transmit to the OTC Reporting Facility, or if the OTC Reporting Facility is unavailable due to system or transmission failure, by telephone to the Operations Department, last sale reports of transactions in OTC Equity Securities executed during normal market hours. Transactions not reported within 10 seconds after execution shall be designated as late.
        (2) Transaction Reporting Outside Normal Market Hours
        (A) Last sale reports of transactions in OTC Equity Securities executed between 8:00 a.m. and 9:30 a.m. Eastern Time shall be reported as soon as practicable but no later than 10 seconds after execution and be designated with the unique trade report modifier, as specified by FINRA, to denote their execution outside normal market hours.
        (B) Last sale reports of transactions in OTC Equity Securities executed between 4:00 p.m. and 8:00 p.m. Eastern Time shall be reported as soon as practicable but no later than 10 seconds after execution and be designated with the unique trade report modifier, as specified by FINRA, to denote their execution outside normal market hours.
        (C) Last sale reports of transactions in OTC Equity Securities executed between midnight and 8:00 a.m. Eastern Time shall be reported by 8:15 a.m. Eastern Time on trade date and be designated with the unique trade report modifier, as specified by FINRA, to denote their execution outside normal market hours.
        (D) Last sale reports of transactions in OTC Equity Securities executed (i) between 8:00 p.m. and midnight Eastern Time or (ii) on any non-business day (i.e., weekend or holiday) shall be reported the following business day by 8:15 a.m. Eastern Time, be designated "as/of" trades to denote their execution on a prior day and be designated with the unique trade report modifier, as specified by FINRA, to denote their execution outside normal market hours.
        (3) Transaction Reporting for Restricted Equity Securities
        (A) Last sale reports of transactions in Restricted Equity Securities effected under Securities Act Rule 144A and executed between midnight and 8:00 p.m. Eastern Time shall be reported on the same business day as the transaction.
        (B) Last sale reports of transactions in Restricted Equity Securities effected under Securities Act Rule 144A executed (i) between 8:00 p.m. and midnight Eastern Time or (ii) on any non-business day (i.e., weekend or holiday) shall be reported the following business day by 8:00 p.m. Eastern Time and be designated "as/of" trades to denote their execution on a prior day.
        (4) Transactions not reported within 10 seconds after execution, or such other time period prescribed by rule, shall be designated as late. Any transaction that is required to be reported on trade date, but is not reported on trade date, must be reported on an "as/of" basis on a subsequent date (T+N) and shall be designated as late. Any transaction that is required to be reported on an "as/of" basis the following business day (T+1), but is not reported T+1, must be reported on a subsequent date (T+N) and shall be designated as late. A pattern or practice of late reporting without reasonable justification or exceptional circumstances may be considered conduct inconsistent with high standards of commercial honor and just and equitable principles of trade in violation of Rule 2010.
        (5) Members also shall append the applicable trade report modifiers as specified by FINRA to all last sale reports, including reports of "as/of" trades:
        (A) if the trade is executed during normal market hours and it is reported later than 10 seconds after execution;
        (B) if the trade is a Seller's Option Trade, denoting the number of days for delivery;
        (C) if the trade is a Cash Trade;
        (D) if the trade is a Next Day Trade;
        (E) if the trade occurs at a price based on an average weighting or another special pricing formula;
        (F) if the trade is a Stop Stock Transaction (as defined in Rule 6420) (Note: the transaction report shall include both the time of execution of the trade and the time at which the member and the other party agreed to the Stop Stock Price; if the Stop Stock Transaction is executed and reported within 10 seconds of the time the member and the other party agree to the Stop Stock Price, the designated modifier shall not be appended and only the time of execution of the trade shall be reported);
        (G) if the transaction report reflects a price different from the current market when the execution price is based on a prior reference point in time (Note: the transaction report shall include both the time of execution of the trade and the prior reference time; if the trade is executed and reported within 10 seconds from the prior reference point in time, the designated modifier shall not be appended and only the time of execution of the trade shall be reported); and
        (H) to identify pre-opening and after-hours trades (executed between 8:00 a.m. and 9:30 a.m. Eastern Time or between 4:00 p.m. and 8:00 p.m. Eastern Time) reported more than 10 seconds after execution.
        To the extent that any of the modifiers required by this Rule conflict, FINRA shall provide guidance regarding the priorities among modifiers and members shall report in accordance with such guidance, as applicable.
        (6) The OTC Reporting Facility will append the appropriate modifier to indicate that a trade was executed outside normal market hours or that a report was submitted late to the OTC Reporting Facility, where such report contains the time of execution, but does not contain the appropriate modifier.
        (7) To identify pre-opening and after-hours trades in OTC Equity Securities reported late, the OTC Reporting Facility will convert to the late modifier, as applicable, on any pre-opening or after-hours report submitted to the OTC Reporting Facility more than 10 seconds after execution.
        (8) All members shall report as soon as practicable to the Market Regulation Department on Form T, last sale reports of transactions in OTC Equity Securities or Restricted Equity Securities for which electronic submission to the OTC Reporting Facility is not possible (e.g., the ticker symbol for the security is no longer available or a market participant identifier is no longer active). Transactions that can be reported to the OTC Reporting Facility, whether on trade date or on a subsequent date on an "as/of" basis (T+N), shall not be reported on Form T.
        (b) Which Party Reports Transaction
        (1) In transactions between two members, the executing party shall report the transaction.
        (2) In transactions between a member and a non-member or customer, the member shall report the transaction.
        For purposes of this paragraph (b), "executing party" shall mean the member that receives an order for handling or execution or is presented an order against its quote, does not subsequently re-route the order, and executes the transaction. In a transaction between two members where both members may satisfy the definition of executing party (e.g., manually negotiated transactions via the telephone), the member representing the sell-side shall report the transaction, unless the parties agree otherwise and the member representing the sell-side contemporaneously documents such agreement.
        (c) Information To Be Reported
        Each last sale report shall contain the following information:
        (1) Symbol of the OTC Equity Security or Restricted Equity Security;
        (2) Number of shares;
        (3) Price of the transaction as required by paragraph (d) below;
        (4) A symbol indicating whether the transaction is a buy, sell or cross, and if applicable, sell short; and
        (5) The time of execution expressed in hours, minutes, and seconds based on Eastern Time, unless another provision of FINRA rules requires that a different time must be included on the report.
        (d) Procedures for Reporting Price, Volume, Capacity and Identification of Other Members
        Members that are required to report pursuant to paragraph (b) above shall transmit last sale reports for all purchases and sales in OTC Equity Securities and Restricted Equity Securities in the following manner:
        (1) Reporting Agency Transactions
        For agency transactions, report the number of shares and the price excluding the commission charged.
        (2) Reporting Dual Agency Transactions
        For dual agency transactions, report the number of shares only once, and report the price excluding the commission charged.
        (3) Reporting Principal and Riskless Principal Transactions
        (A) For principal transactions, except as provided in subparagraph (B) hereof, report each purchase and sale transaction separately and report the number of shares and the price. For principal transactions that are executed at a price that includes a mark-up, mark-down or service charge, the price reported shall exclude the mark-up, mark-down or service charge. Such reported price shall be reasonably related to the prevailing market, taking into consideration all relevant circumstances including, but not limited to, market conditions with respect to the OTC Equity Security, the number of shares involved in the transaction, the published bids and offers with size displayed in any inter-dealer quotation system at the time of the execution (including the reporting firm's own quotation), the cost of execution and the expenses involved in clearing the transaction.
        (B) Exception: A "riskless" principal transaction in which a member, after having received an order to buy a security, purchases the security as principal at the same price to satisfy the order to buy or, after having received an order to sell, sells the security as principal at the same price to satisfy the order to sell, shall be reported as one transaction in the same manner as an agency transaction, excluding the mark-up or mark-down, commission-equivalent, or other fee. Alternatively, a member may report a riskless principal transaction by submitting the following report(s) to the OTC Reporting Facility:
        (i) The member with the obligation to report the transaction pursuant to paragraph (b) above must submit a last sale report for the initial leg of the transaction.
        (ii) Regardless of whether a member has a reporting obligation pursuant to paragraph (b) above, the firm must submit, for the offsetting, "riskless" portion of the transaction, either:
        a. a clearing-only report with a capacity indicator of "riskless principal," if a clearing report is necessary to clear the transaction; or
        b. a non-tape, non-clearing report with a capacity indicator of "riskless principal," if a clearing report is not necessary to clear the transaction.
        Example:
        SELL as a principal 100 shares to another member at 40 to fill an existing order;
        BUY as principal 100 shares from a customer at 40 minus a mark-down of $12.50;
        REPORT 100 shares at 40 by submitting to the OTC Reporting Facility either a single trade report marked with a "riskless principal" capacity indicator or by submitting the following reports:
        (1) where required by this Rule, a tape report marked with a "principal" capacity indicator; and
        (2) either a non-tape, non-clearing report or a clearing-only report marked with a "riskless principal" capacity indicator.
        (4) Identification of Other Members for Agency and Riskless Principal Transactions
        Any member that has a reporting obligation pursuant to paragraph (b) above and is acting in a riskless principal or agency capacity on behalf of one or more other members shall submit to FINRA one or more non-tape (either non-tape, clearing-only or non-tape, non-clearing) report(s) identifying such other member(s) as a party to the transaction, if such other member(s) is not identified on the initial trade report submitted to FINRA or a report submitted to FINRA pursuant to Rule 6622(d)(3)(B) for the offsetting leg of a riskless principal transaction. Nothing in this Rule 6622(d)(4) shall negate or modify the riskless principal transaction reporting requirements set forth in Rule 6622(d)(3)(B).
        Example #1:
        Member A, as agent or riskless principal on behalf of Member B, BUYS 100 shares from Member C at 40 (no mark-down included)
        Member A has the reporting obligation under Rule 6622(b)
        TAPE REPORT 100 shares at 40 By Member A between Member A and Member C
        NON-TAPE REPORT 100 shares at 40 By Member A identifying Member B
        Example #2A:
        Member A MATCHES, as agent, the orders of Member B and Member C for 100 shares at 40
        Member A has the reporting obligation under Rule 6622(b)
        TAPE REPORT 100 shares at 40 By Member A between Member A and Member B (or Member C)
        NON-TAPE REPORT 100 shares at 40 By Member A identifying Member C (or Member B)
        Example #2B:
        Member A MATCHES, as agent, the orders of Member B and Member C for 100 shares at 40
        Member A has the reporting obligation under Rule 6622(b)
        TAPE REPORT a CROSS of 100 shares at 40 By Member A
        NON-TAPE REPORT 100 shares at 40 By Member A identifying Member B and
        NON-TAPE REPORT 100 shares at 40 By Member A identifying Member C
        Example #3:
        Member A, as agent or riskless principal on behalf of Member B, BUYS 100 shares on a foreign exchange at 40
        DO NOT TAPE REPORT this leg if reported to foreign exchange
        NO NON-TAPE REPORT required; however, Member A may submit a NON-TAPE REPORT as between Member A and Member B
        (e) Reporting Requirements For Certain Transactions and Transfers of Securities
        (1) The following shall not be reported to the OTC Reporting Facility:
        (A) transactions that are part of a primary distribution by an issuer or a registered secondary distribution (other than "shelf distributions") or of an unregistered secondary distribution; for purposes of this subparagraph, the term “distribution” has the meaning set forth under Rule 100 of SEC Regulation M;
        (B) transactions made in reliance on Section 4(2) of the Securities Act;
        (C) transactions reported on or through an exchange;
        (D) transfers of securities made pursuant to an asset purchase agreement (APA) that is subject to the jurisdiction and approval of a court of competent jurisdiction in insolvency matters, provided that the purchase price under the APA is not based on, and cannot be adjusted to reflect, the current market prices of the securities on or following the effective date of the APA; and
        (E) the transfer of equity securities for the sole purpose of creating or redeeming an instrument that evidences ownership of or otherwise tracks the underlying securities transferred (e.g., an American Depositary Receipt or exchange-traded fund).
        (2) The following shall not be reported to the OTC Reporting Facility for publication purposes, but shall be reported for regulatory transaction fee assessment purposes under Rule 7330(g):
        (A) Transactions where the buyer and seller have agreed to trade at a price substantially unrelated to the current market for the security;
        (B) Purchases or sales of securities effected upon the exercise of an option pursuant to the terms thereof or the exercise of any other right to acquire securities at a pre-established consideration unrelated to the current market; and
        (C) Transfers of proprietary securities positions where the transfer (1) is effected in connection with a merger or direct or indirect acquisition and (2) is not in furtherance of a trading or investment strategy. Members must provide FINRA at least three business days advance written notice of their intent to use this exception, including the basis for their determination that the transfer meets the terms of the exception.
        (f) Reporting Cancelled and Reversed Trades
        (1) Obligation and Party Responsible for Reporting Cancelled and Reversed Trades
        With the exception of trades cancelled in accordance with the Rule 11890 Series, members shall report to the OTC Reporting Facility the cancellation or reversal of any trade previously submitted to the OTC Reporting Facility. The member responsible under Rule 6622 for submitting the original trade report shall submit the cancellation or reversal report in accordance with the procedures set forth in paragraphs (f)(2), (3) and (4).
        (2) Deadlines for Reporting Cancelled and Reversed Trades in OTC Equity Securities
        (A) For trades executed between 9:30 a.m. and 4:00 p.m. Eastern Time and cancelled at or before 4:00 p.m. on the date of execution, the member responsible under paragraph (f)(1) shall report the cancellation as soon as practicable but no later than 10 seconds after the time the trade is cancelled.
        (B) For trades executed between 9:30 a.m. and 4:00 p.m. Eastern Time and cancelled after 4:00 p.m., but before 8:00 p.m. on the date of execution, the member responsible under paragraph (f)(1) shall use its best efforts to report the cancellation not later than 8:00 p.m. on the date of execution, and otherwise it shall report the cancellation on the following business day by 8:00 p.m.
        (C) For trades executed between 9:30 a.m. and 4:00 p.m. Eastern Time and cancelled at or after 8:00 p.m. on the date of execution, the member responsible under paragraph (f)(1) shall report the cancellation on the following business day by 8:00 p.m.
        (D) For trades executed outside the hours of 9:30 a.m. to 4:00 p.m. Eastern Time and cancelled prior to 8:00 p.m. on the date of execution, the member responsible for reporting under paragraph (f)(1) shall report the cancellation by 8:00 p.m.
        (E) For trades executed outside the hours of 9:30 a.m. to 4:00 p.m. Eastern Time and cancelled at or after 8:00 p.m. on the date of execution, the member responsible under paragraph (f)(1) shall report the cancellation on the following business day by 8:00 p.m.
        (F) For any trade cancelled or reversed on any date after the date of execution, the member responsible under paragraph (f)(1) shall report the cancellation (or reversal) (i) by 8:00 p.m. on the date of cancellation (or reversal) if the trade is cancelled (or reversed) before 8:00 p.m., or (ii) by 8:00 p.m. on the following business day if the trade is cancelled (or reversed) at or after 8:00 p.m.
        (G) For purposes of determining the deadline by which a trade cancellation (or reversal) must be reported to the OTC Reporting Facility pursuant to paragraph (f) of this Rule, the term "cancelled" (or "reversed," as applicable) shall mean the time at which (i) the member with the reporting responsibility informs its contra party, or is informed by its contra party, that a trade is being cancelled (or reversed), (ii) the member with the reporting responsibility and its contra party agree to cancel (or reverse) a trade if neither party can unilaterally cancel (or reverse) the trade, or (iii) the member with the reporting responsibility takes an action to cancel (or reverse) the trade on its books and records, whichever event occurs first.
        (3) Deadlines for Reporting Cancelled and Reversed Trades in Restricted Equity Securities
        (A) For trades previously submitted to the OTC Reporting Facility and cancelled before 8:00 p.m. Eastern Time on the date of execution, the member responsible under paragraph (f)(1) shall report the cancellation by 8:00 p.m.
        (B) For trades cancelled at or after 8:00 p.m. Eastern Time on the date of execution, the member responsible under paragraph (f)(1) shall report the cancellation on the following business day by 8:00 p.m.
        (C) For any trade cancelled or reversed on any date after the date of execution, the member responsible under paragraph (f)(1) shall report the cancellation or reversal
        (i) by 8:00 p.m. on the date of cancellation if the trade is cancelled before 8:00 p.m., or
        (ii) by 8:00 p.m. on the following business day if the trade is cancelled at or after 8:00 p.m.
        (4) When submitting a report of a reversal to the OTC Reporting Facility, members must identify the original report of the previously submitted trade by including the original report date and the control number assigned by the OTC Reporting Facility to the original trade report.
        (g) Transactions in Foreign Equity Securities
        (1) For purposes of this paragraph, the term "foreign equity security" means any OTC Equity Security that is issued by a corporation or other entity incorporated or organized under the laws of any foreign country.
        (2) Transactions in foreign equity securities shall be reported to the OTC Reporting Facility unless:
        (A) the transaction is executed on and reported to a foreign securities exchange; or
        (B) the transaction is executed over the counter in a foreign country and is reported to the regulator of securities markets for that country.
        (h) A member may agree to allow another member to report and lock-in trades on its behalf, if both parties have completed an agreement to that effect (a "give up agreement") as specified by FINRA and submitted it to the OTC Reporting Facility. However, the member with the reporting obligation remains responsible for the transaction submitted on its behalf. Further, both the member with the reporting obligation and the member submitting the trade to the OTC Reporting Facility are responsible for ensuring that the information submitted is in compliance with all applicable rules and regulations.

        • • • Supplementary Material: --------------

        .01 For purposes of reporting secondary market transactions in non-exchange-listed DPP securities pursuant to this Rule 6622, the following definitions shall apply. "Date of execution" means the date when the parties to a transaction in a DPP have agreed to all of the essential terms of the transaction, including the price and number of the units to be traded. "Time of execution" means the time when the parties to a transaction in a DPP have agreed to all of the essential terms of the transaction, including the price and number of the units to be traded.

        .02 Members that would otherwise have the trade reporting obligation under paragraph (b) of this Rule must provide to FINRA notice that they are relying on the exception from trade reporting under paragraph (e)(1)(A) of this Rule for transactions that are part of an unregistered secondary distribution. For each transaction that is part of the unregistered secondary distribution and not trade reported, the member must provide the following information to FINRA: security name and symbol, execution date, execution time, number of shares, trade price and parties to the trade. Such notice and information must be provided no later than three (3) business days following trade date and in such form as specified by FINRA. If the trade executions will occur over multiple days, then initial notice and available information must be provided no later than three (3) business days following the first trade date and final notice and information must be provided no later than three (3) business days following the last trade date. The member must retain records sufficient to document the basis for relying on this trade reporting exception, including but not limited to, the basis for determining that the definition of "distribution" under Rule 100 of SEC Regulation M has been satisfied, as well as evidence of compliance with applicable notification requirements under Rule 5190.

        .03 Trade Reporting Time Frame

        (a) With respect to the requirement under paragraphs (a) and (f) of this Rule that members report trades and trade cancellations "as soon as practicable," a member with the trade reporting obligation under paragraph (b) of this Rule must adopt policies and procedures reasonably designed to comply with this requirement and must implement systems that commence the trade reporting process without delay upon execution (or cancellation, as applicable). Where a member has such reasonably designed policies, procedures and systems in place, the member generally will not be viewed as violating the "as soon as practicable" requirement because of delays in trade reporting that are due to extrinsic factors that are not reasonably predictable and where the member does not purposely intend to delay the reporting of the trade. In no event may a member purposely withhold trade reports, e.g., by programming its systems to delay reporting until the last permissible second.
        (b) FINRA recognizes that a very small universe of trades are reported manually, and as a result, even where a member does not purposely withhold trade reports, the trade reporting process may not be completed within 10 seconds following execution. In these cases, for purposes of determining whether "reasonable justification" exists to excuse what otherwise may be deemed to be a pattern or practice of late trade reporting under this Rule and Rule 6623, FINRA will take into consideration such factors as the complexity and manual nature of the execution and reporting of the trade, where the trade details must be manually entered into the trade reporting system following execution.

        .04 All time fields required by this Rule must be reported in hours, minutes, seconds and milliseconds, if the member's system captures time in milliseconds.

        Cross Reference–

        6623, Transaction Reporting

        Amended by SR-FINRA-2013-050 and SR-FINRA-2014-039 eff. Nov. 17, 2014.
        Amended by SR-FINRA-2013-013 eff. Nov 4, 2013.
        Amended by SR-FINRA-2011-027 eff. Nov. 1, 2011.
        Amended by SR-FINRA-2011-061 eff. Oct. 14, 2011.
        Amended by SR-FINRA-2011-024 eff. June 17, 2011.
        Amended by SR-FINRA-2010-058 eff. Feb. 28, 2011.
        Amended by SR-FINRA-2010-043 eff. Feb. 28, 2011.
        Amended by SR-FINRA-2010-051 eff. Nov. 1, 2010.
        Amended by SR-FINRA-2009-061 eff. Nov. 1, 2010.
        Amended by SR-FINRA-2010-003 eff. June 28, 2010.
        Amended by SR-FINRA-2010-017 eff. June 1, 2010.
        Amended by SR-FINRA-2009-082 eff. April 12, 2010.
        Amended by SR-FINRA-2010-002 eff. Feb. 15, 2010.
        Amended by SR-FINRA-2009-031 eff. Jan. 11, 2010.
        Amended by SR-FINRA-2008-011 eff. Aug. 3, 2009.
        Amended by SR-FINRA-2009-024 eff. May 4, 2009.
        Amended by SR-FINRA-2008-060 eff. Jan. 12, 2009.
        Amended by SR-FINRA-2008-057 eff. Dec. 15, 2008.
        Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
        Amended by SR-NASD-2007-030 eff. Apr. 20, 2007.
        Amended by SR-NASD-2006-120 eff. Dec. 4, 2006.
        Amended by SR-NASD-2006-055 eff. Dec. 1, 2006.
        Amended by SR-NASD-2005-087 eff. Aug. 1, 2006.
        Amended by SR-NASD-2005-062 eff. June 9, 2005.
        Amended by SR-NASD-2005-027 eff. Feb. 14, 2005.
        Amended by SR-NASD-2004-151 eff. Oct. 12, 2004.
        Amended by SR-NASD-2004-021 eff. Sept. 20, 2004.
        Amended by SR-NASD-2004-076 eff. May 5, 2004.
        Amended by SR-NASD-2004-034 eff. Feb. 25, 2004.
        Amended by SR-NASD-2003-154 eff. Nov. 3, 2003.
        Amended by SR-NASD-2003-98 eff. Sept. 4, 2003.
        Amended by SR-NASD-2003-14 eff. January 31, 2003.
        Amended by SR-NASD-2001-36 eff. July 6, 2001.
        Amended by SR-NASD-2000-52 eff. Aug. 30, 2000.
        Amended by SR-NASD-99-57 eff. Oct. 25, 1999.
        Amended by SR-NASD-98-59 eff. Sept. 30, 1999.
        Amended by SR-NASD-98-08 eff. Sept. 30, 1999.
        Amended by SR-NASD-98-47 eff. July 9, 1998.
        Amended by SR-NASD-94-35 eff. Dec. 12, 1994.
        Amended by SR-NASD-94-53 eff. Oct. 24, 1994.
        Amended by SR-NASD-92-48 eff. Dec. 20, 1993.
        Amended by SR-NASD-93-40 eff. Oct. 7, 1993.

        Selected Notices: 93-62, 93-83, 99-65, 99-66, 07-25, 08-57, 09-08, 09-21, 09-52, 10-07, 10-24, 10-26, 10-29, 10-48, 11-40, 13-19, 14-21.

      • 6623. Timely Transaction Reporting

        FINRA emphasizes the obligations of members to report securities transactions within the required time period. All reportable transactions not reported within the required time period shall be marked late, and FINRA routinely monitors members' compliance with the reporting requirements. If FINRA finds a pattern or practice of unexcused late reporting, that is, repeated reports of executions submitted after the required time period without reasonable justification or exceptional circumstances, the member may be found to be in violation of Rule 2010. Exceptional circumstances will be determined on a case-by-case basis and may include instances of system failure by a member or service bureau, or unusual market conditions, such as extreme volatility in a security, or in the market as a whole. Timely reporting of all transactions is necessary and appropriate for the fair and orderly operation of the marketplace, and FINRA will view noncompliance as a rule violation.
        Amended by SR-FINRA-2009-061 eff. Nov. 1, 2010.
        Amended by SR-FINRA-2010-003 eff. June 28, 2010.
        Amended by SR-FINRA-2008-057 eff. Dec. 15, 2008.
        Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
        Adopted by SR-NASD-2005-087 eff. Aug. 1, 2006.

        Selected Notices: 08-57, 10-24, 10-26.

      • 6624. Trade Reporting of Short Sales

        Pursuant to applicable trade reporting rules, members must indicate on trade reports submitted to FINRA whether a transaction is a short sale transaction ("short sale reporting requirements"). The short sale reporting requirements apply to transactions in all OTC Equity Securities, as defined in Rule 6420. Thus, all short sale transactions in these securities reported to FINRA must carry a "short sale" indicator.
        Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
        Amended by SR-NASD-2007-047 eff. July 6, 2007.
        Amended by SR-NASD-2006-087 eff. Aug. 1, 2006.
        Adopted by SR-NASD-2005-087 eff. Aug. 1, 2006.

        Selected Notices: 07-31, 08-57.

      • 6625. Exemption from Trade Reporting Obligation for Certain Alternative Trading Systems

        (a) Pursuant to the Rule 9600 Series, the staff for good cause shown after taking into consideration all relevant factors, may exempt, upon application and subject to specified terms and conditions, a member alternative trading system ("ATS") from the trade reporting obligation under paragraph (b) of Rule 6622, if such exemption is consistent with the protection of investors and the public interest. The staff will grant an exemption only if all of the following criteria are satisfied:
        (1) Trades are between ATS subscribers that are both FINRA members.
        (2) The ATS demonstrates that:
        (A) The member subscribers are fully disclosed to one another at all times on the ATS;
        (B) The system does not permit automatic execution, and a member subscriber must take affirmative steps beyond the submission of an order to agree to a trade with another member subscriber;
        (C) The trade does not pass through any ATS account, and the ATS does not in any way hold itself out to be a party to the trade; and
        (D) The ATS does not exchange shares or funds on behalf of the member subscribers, take either side of the trade for clearing or settlement purposes, including, but not limited to, at DTC or otherwise, or in any other way insert itself into the trade.
        (3) The ATS and the member subscribers acknowledge and agree in writing that the ATS shall not be deemed a party to the trade for purposes of trade reporting and that trades shall be reported by the member subscriber that, as between the two member subscribers, would satisfy the definition of "executing party" under FINRA trade reporting rules.
        (4) The ATS agrees to provide to FINRA on a monthly basis, or such other basis as prescribed by FINRA, data relating to the volume of trades by security executed by the ATS's member subscribers using the ATS's system, and the ATS acknowledges that failure to report such data to FINRA, in addition to constituting a violation of FINRA rules, will result in revocation of any exemption granted pursuant to this Rule.
        (5) The ATS provides FINRA with a link to a public website that contains, at no charge and in a substantially similar format to ATS Trading Information published by FINRA pursuant to Rule 6110, its ATS Trading Information for OTC Equity Securities no later than four weeks following the end of the ATS Trading Information week.
        (b) Where FINRA has granted an exemption under this Rule, trades shall be reported to FINRA by the member subscriber that, as between the two member subscribers, satisfies the definition of "executing party" under paragraph (b) of Rule 6622.
        (c) Definitions
        For purposes of this Rule, the term:
        (1) "OTC Equity Security" has the same meaning as that term is defined in Rule 6420; and
        (2) "ATS Trading Information" means:
        (A) the number of shares of each OTC Equity Security executed within the ATS or executed by the ATS's member subscribers using the ATS's system; and
        (B) the number of trades in an OTC Equity Security executed within the ATS or executed by the ATS's member subscribers using the ATS's system.

        • • • Supplementary Material: --------------

        .01 When calculating and posting the volume of securities traded and the number of trades pursuant to paragraph (a)(5), an ATS shall include only those trades executed by the ATS's member subscribers using the ATS's system. If two orders are crossed by the ATS, the volume shall include only the number of shares crossed as a single trade (e.g., crossing a buy order of 1,000 shares with a sell order of 1,000 shares would be calculated as a single trade of 1,000 shares of volume). In addition, to meet the "substantially similar format" requirement in paragraph (a)(5), the data must include the same data elements for the same timeframes, be accessible in the same manner as FINRA makes data available (e.g., downloadable), and include data for the same time periods (including current and historical data).

        .02 For purposes of calculating and posting volume under paragraph (a)(5) of this Rule, a trade is considered to be executed within an ATS if the ATS (i) executes the trade; (ii) is considered the "executing party" to the trade under FINRA rules; or (iii) otherwise matches orders constituting the trade in a manner as contemplated by SEA Rule 3b-16 or SEC Regulation ATS. This would include, but not be limited to: any trade executed as a result of the ATS bringing together the purchaser and seller on or through its systems; any trade executed by the ATS's subscribers where the subscribers used the ATS to negotiate the trade, even if the ATS did not itself execute the trade; or any trade in which the ATS takes either side of a trade for clearing or settlement or in any other way inserts itself into a trade (e.g., exchanging securities or funds on behalf of one or both subscribers taking part in the trade). If an ATS routes an order to another member firm or other execution venue for handling or execution where that initial order matches against interest resident at the other venue, then the ATS would not be considered the executing party and would not include such volume for reporting purposes. A trade continues to be considered executed "within an ATS" for purposes of calculating and posting volume under this Rule, even if the ATS has been granted an exemption to its trade reporting obligations under the Rule.

        Amended by SR-FINRA-2016-002 eff. Feb. 9, 2016.
        Adopted by SR-FINRA-2011-051 eff. Nov. 4, 2011.

    • 6630. Applicability of FINRA Rules to Securities Previously Designated as PORTAL Securities

      (a) The following are specifically applicable to transactions and business activities relating to securities that, prior to October 26, 2009, had been designated by The Nasdaq Stock Market LLC for inclusion in the PORTAL Market ("PORTAL securities"):
      (1) Rules 0130, 0140, 2010, 2020, 2111, 2121, 2232, 2251, 2261, 2262, 2269, 5310, and 8210;
      (2) the Rule 8100 and 8300 Series; and
      (3) Rules 0190, 5210, 5220, and Supplementary Material to Rule 2121.
      (b) The following are specifically applicable to transactions and business activities relating to PORTAL securities, with the exceptions specified below:
      (1) Rules 2150 and 4330; and
      (2) Rule 4510 Series.
      (c) The following are applicable to members and persons associated with members regardless of whether the member participates in transactions in PORTAL securities:
      (1) Rules 0110, 0120, and 0160.
      (2) Rules 1020, 2210, 3210, 3220, 3270, 3280, 4120, 4360, and 5260.
      (d) The following are not applicable to transactions and business activities relating to PORTAL securities:
      (1) Rules 2310, 2320, 2341, 2360, 4210, 4320, 4560, 5110, 5130, and 5141.
      Amended by SR-FINRA-2019-009 eff. May 8, 2019.
      Amended by SR-FINRA-2017-004 eff. April 3, 2017.
      Amended by SR-FINRA-2016-026 eff. July 9, 2016.
      Amended by SR-FINRA-2015-030 eff. Sept. 21, 2015.
      Amended by SR-FINRA-2015-027 eff. Aug. 24, 2015.
      Amended by SR-FINRA-2014-023 eff. May 9, 2014.
      Amended by SR-FINRA-2014-016 eff. May 1, 2014.
      Amended by SR-FINRA-2013-001 eff. Feb. 4, 2013.
      Amended by SR-FINRA-2012-027 eff. July 9, 2012.
      Amended by SR-FINRA-2011-052 eff. May 31, 2012.
      Amended by SR-FINRA-2012-007 eff. Feb. 21, 2012.
      Amended by SR-FINRA-2011-065 eff. Jan. 1, 2012.
      Amended by SR-FINRA-2011-065 eff. Dec. 5, 2011.
      Amended by SR-FINRA-2011-024 eff. June 17, 2011.
      Amended by SR-FINRA-2010-060 eff. Feb. 8, 2011.
      Amended by SR-FINRA-2010-060 eff. Dec. 15, 2010.
      Amended by SR-FINRA-2010-047 eff. Oct. 15, 2010.
      Amended by SR-FINRA-2010-003 eff. June 28, 2010.
      Amended by SR-FINRA-2010-023 eff. June 14, 2010.
      Amended by SR-FINRA-2010-002 eff. Feb. 15, 2010.
      Amended by SR-FINRA-2010-002 eff. Feb. 8, 2010.
      Amended by SR-FINRA-2009-078 eff. Dec. 14, 2009.
      Amended by SR-FINRA-2009-062 eff. Oct. 19, 2009.
      Amended by SR-FINRA-2007-024 eff. Sep. 8, 2009.
      Amended by SR-FINRA-2009-046 eff. Aug. 17, 2009.
      Amended by SR-FINRA-2009-005 eff. Feb. 17, 2009.
      Amended by SR-FINRA-2008-057 eff. Dec. 15, 2008.
      Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
      Renumbered from Rule 5350 and amended by SR-NASD-2005-087 eff. Aug. 1, 2006.
      Amended by SR-NASD-99-60 eff. March 23, 2004.
      Amended by SR-NASD-99-66 eff. March 6, 2001.

      Selected Notices: 08-57, 10-26, 12-13.