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  • 11700. RECLAMATIONS AND REJECTIONS

    • 11710. General Provisions

      (a) Definition
      The term "reclamation" as used in this Code shall mean a claim for the right to return or the right to demand the return of a security which has been previously accepted. Securities which have been presented for delivery on a transaction and which for a valid reason have been refused shall within the meaning of Rules 11710 and 11720, inclusive, be deemed a rejection for the purposes of these Rules.
      (b) Uniform Reclamation Form
      (1) Form Must Accompany Securities
      A properly executed Uniform Reclamation Form must accompany securities on reclamation or return.*
      (2) Absence of Form Permits Sell-Out
      Any security reclaimed or returned on a transaction without a properly executed Uniform Reclamation Form as prescribed within this Rule may, at the option of the receiving broker, be "sold-out" pursuant to Rule 11820, however, in no event later than three business days after receipt of the receiving broker or its agent.
      (c) Time for Delivery of Reclamation and Manner of Settlement

      (1) A security with an irregularity having been delivered may be returned or reclaimed between the hours established by rule or practice in the community where the delivery or reclamation is to be made.

      (2) When a security is returned or reclaimed, the party who originally delivered it shall immediately give the party returning it either the security in proper form for delivery in exchange for the security originally delivered, or the money amount of the contract. In the latter case, unless otherwise agreed, the party to whom the security is returned shall be deemed to be failing to deliver the security until such time as a proper delivery is made.

      (d) Minor Irregularities
      Reclamation for an irregularity which affects only the currency of the security in the market shall be made within 15 days from the day of original delivery, except that, if the security is issued under the jurisdiction of a foreign country, the period for reclamation under this section shall be 45 days from the day of original delivery.
      (e) Wrong Form of Certificate
      Reclamation, by reason of the fact that a form of certificate was delivered which was not a good delivery, but which is exchangeable without charge for a certificate which is a good delivery, shall be made within 15 days from the day of original delivery.

      * Specifications for use of the Uniform Reclamation Form are contained in the Final Report of the Banking and Securities Industry Committee entitled "Four Uniform Forms," dated December 22, 1971.


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

      .01 Uniform Reclamation Form.

      Uniform Reclamation Form To Accompany Reclamations Subject to Rules & Regulations of: Stock Clearing Corp.
      Annex Clearing Corp.
      National Clearing Corp.
      FINRA - Uniform Practice Code
      RECLAIMED TO

      REC No. NAME OF RECEIVER DATE SECURITIES
      BELOW RECEIVED
      RECLAIMED BY

      DEL. No. NAME OF DELIVERER DATE OF RETURN
      QUANTITY

      Security Description (certifcate's can be applied to reverse side of copy #1 AMOUNT
      Wrong Security __________ Should Be

      Wrong Money __________ Our Money

      Carries Due Bill

      Duplicates Delivery __________ You Delivered On

      Needs Signature Guarantee

      Wrong Settlement Date __________ Our S/D

      Needs Tax Stamp

      No Instructions

      Release Power of Attorney

      Needs Legal Opinion

      Coupon Missing

      Needs Better Account Date

      Other - Explanation



      _______________

      Name of Person making Reclamation (Print )


      _______________

      Telephone Number


      _______________

      Extension

      ATTACH COPIES 1 & 2 TO CERTIFICATE - COPIES 3 & 4 ARE RETAINED BY DELIVERER

      FORM AS SHOWN IS NOT DRAWN TO SCALE

      Amended by SR-FINRA-2010-030 eff. Dec. 15, 2010.
      Amended eff. Sept. 1, 1969; Dec. 1, 1972.

      Selected Notice: 10-49.

    • 11720. Irregular Delivery — Transfer Refused — Lost or Stolen Securities

      (a) Irregular Delivery
      Reclamation, by reason of the fact of an irregularity in the delivery of a security, shall be within 30 months after the settlement date of the contract. For purposes of this paragraph (a), the term "irregular delivery" shall include, among other things, wrong, duplicate, misdirected or over-deliveries and delivery of unit investment trust securities having the incorrect payment option.
      (b) Transfer Refused
      Reclamation, by reason of the fact that a specific certificate tendered in settlement of a contract has been presented for transfer and transfer thereof has been refused by the transfer agent, shall be within 30 months after the settlement date of the contract.
      (c) Lost or Stolen or Confiscated Securities
      Reclamation, by reason of the fact that a security is lost or stolen or confiscated shall be within 30 months after the settlement date of the contract.
      (d) Running of 30 Month Period
      The running of the 30-month period described in this Rule shall not be deemed to foreclose a member's rights to pursue its claim via other open avenues, including but not limited to the FINRA arbitration procedure.
      Amended by SR-FINRA-2010-060 eff. Dec. 15, 2010.
      Amended by SR-FINRA-2010-030 eff. Dec. 15, 2010.
      Amended by SR-NASD-91-13 eff. Nov. 1, 1991.
      Amended eff. Jan. 2, 1968; Sept. 1, 1971; Apr. 1, 1974; Mar. 18, 1983; and September 11, 1991.

      Selected Notices: 83-69, 10-49.

      • 11721. Obligations of Members Who Discover Securities in Their Possession to Which They Are Not Entitled

        Any member who discovers securities in its possession to which it is not entitled is required to make reasonable attempts to ascertain and to promptly notify the true owner of such securities and to take affirmative steps to correct the situation. Failure to abide by this requirement may result in a violation of Rule 2010.
        Amended by SR-FINRA-2010-030 eff. Dec. 15, 2010.
        Amended by SR-NASD-91-13 eff. Nov. 1, 1991.
        Amended eff. Jan. 2, 1968; Sept. 1, 1971; Apr. 1, 1974; Mar. 18, 1983; and September 11, 1991.

        Selected Notices: 83-69, 10-49.

    • 11730. Called Securities

      Reclamation by reason of the fact that a security was delivered after publication of notice of call for its redemption, may be made without limit of time and such security may be returned to the party who held it at the time of such publication; except that this Rule shall not apply when an entire issue is called for redemption or when the security involved was dealt in specifically as a "called" security.
      Amended by SR-FINRA-2010-030 eff. Dec. 15, 2010.
      Amended eff. Jan. 2, 1968.

      Selected Notice: 10-49.

    • 11740. Marking to the Market

      (a) Demand for Deposit
      The party who is partially unsecured by reason of a change in the market value of the subject of a contract in securities may demand from the other party a deposit equal to the difference between the contract price and the market price, without being required to make a mutual deposit. Such deposit shall be made either with the member demanding same or with a mutually agreed-on depositary or, on failure to agree on a depositary, with any member of the Federal Reserve System with an office in the financial district of the city where the unsecured party maintains its office.
      (b) Assignment of Contract
      Either party to a contract in securities may assign the contract, either at the time the transaction is effected or at the time a request is made for funds to "mark to the market," provided the other party to the contract assents to the assignment.
      (c) Refund of Deposit
      If the market value of the subject of the contract changes so as to permit a total or partial refund of any deposits which have been made in accordance with paragraph (a) of this Rule, such refunds shall be made on demand.
      (d) Delivery of Demand for Deposit or Refund
      All demands for deposits or refunds shall be in writing and shall be delivered at the office of the party upon whom the demand is made during the business hours of member banks of the Federal Reserve System located in the community where such party maintains its office, and such demands shall be complied with immediately.
      (e) Failure to Comply with Demand
      Failure of a party to comply with a demand for a deposit or refund made in accordance with paragraphs (a), (c) and (d) of this Rule shall entitle the party making the demand to close the contract without notice, by making offsetting purchase or sale contracts in the best available market for the account and liability of the party failing to comply with said demand.
      (f) Contract Closure
      No contract shall be closed pursuant to paragraph (e) of this Rule prior to the expiration of regular delivery time in the community where the party making the demand maintains its office, on the next business day following the day when notice of such demand was received by the other party.
      (g) Notice of Offsetting Purchase or Sale
      The party making such offsetting purchase or sale contracts shall as promptly as possible on the day on which they are made (1) notify the other party via letter, facsimile transmission, electronic mail, or other comparable written media, and (2) mail or deliver formal confirmation of same to the other party and a copy of said confirmation to the Committee.
      Amended by SR-FINRA-2010-030 eff. Dec. 15, 2010.
      Amended eff. Feb. 21, 1969; Mar. 1, 1970.

      Selected Notice: 10-49.