Monday, August 27, 2018

Equity Trader Alert #2018 - 63
FINRA/Nasdaq TRF Product and Pricing Updates Effective September 2018


  • System Impact
  • Pricing

Markets Impacted:

Contact Information:


Product Announcement

As previously announced in ETA2018-41 and ETA2018-52, on September 10, 2018, FINRA and Nasdaq are launching FINRA/ Nasdaq TRF Chicago to provide FINRA members with a new alternative for meeting their trade reporting obligations under FINRA rules.

On Saturday, September 8, 2018, the FINRA/Nasdaq TRF Chicago and FINRA/Nasdaq TRF Carteret production systems will be available for User Acceptance Testing in accordance with the Nasdaq Saturday Testing Policy. Public User Acceptance Testing will enable full end-to-end testing with the CTA / UTP SIPs and OATS (Note: NSCC testing will not be available in the production UAT; NSCC testing is currently available in the Nasdaq Test Facility.)

  • Saturday UAT Production testing will be 9:00 am – 12:00 pm.
  • Please register by September 4th with Nasdaq Trading Services
  • Nasdaq Trading Services will be available for questions and support.

From September 10 - 21, 2018, FINRA/Nasdaq TRF Chicago will be available for firms to submit transactions in production for test securities only. Non-test securities will be rejected. For the list of available test symbols, please refer to the resources link. Starting on September 24th, all Reg NMS stocks will be available for reporting on FINRA/Nasdaq TRF Chicago.

Pricing Changes

The following pricing and program changes will be effective, Tuesday, September 4, 2018, subject to a proposed rule change filed with the SEC to amend FINRA Rule 7620A (see SR-FINRA-2018-029). These changes will apply to the existing FINRA/Nasdaq Trade Reporting Facility Carteret (FINRA/Nasdaq TRF Carteret) and, upon commencement of operation, the new FINRA/Nasdaq Trade Reporting Facility Chicago (FINRA/Nasdaq TRF Chicago).

      1. Nasdaq, as the FINRA/Nasdaq TRF Business Member, is assessing a new FINRA/Nasdaq TRF monthly Participation Fee, $350 per firm CRD.1 The Participation Fee will be assessed on each registered participant, irrespective of the level of FINRA/Nasdaq TRF activity or whether the participant is identified (as Executing Party or Contra Party) in any trade report submitted to the FINRA/Nasdaq TRF in a given month. Retail Participants, defined below, are exempt from this fee.
      2. Nasdaq is modifying the Non-Comparison / Accept monthly fee by raising the cap threshold criteria and lowering Executing Party Media and Non-Media rates for all participants other than Retail Participants.
    Cap Qualification Executing Party Average Daily Media Executions
    Per Tape (A,B,C) Existing 2,500 New 5,000
    Non-Comparison Accept Rates Standard Capped
    Media and Non-Media / Executing Party (EP)

    (Per Tape A, B, C)
    Rate x (# of EP Executions per Tape)

    Rate 0.018 0.015
    (Rate) x (Capped EP Executions per Tape) x (# of Trading Days per month)

    Rate 0.018 0.013
    Activity Cap 2,500 5,000
    Media and Non-Media / Contra Party (CP)

    (Per Tape A, B, C)
    Rate x (# of CP Executions per Tape)

    Rate 0.013 0.013
    (Rate) x (Capped CP Executions per Tape) x (# of Trading Days per month)

    Rate 0.013 0.013
    Activity Cap 2,500 5,000
      3. Nasdaq is adjusting the existing ATS Market Maker Media / Contra Party monthly fee cap from $5,000 to $10,000 per Tape per month (other than for Retail Participants). For more information about the ATS Market Maker Media / Contra Party Cap program, please refer to FINRA Rule Filing SR-FINRA-2016-009.
      4. Nasdaq is implementing a new tier in the ATS Market Maker Program, called the ATS Market Maker Combined Media Activity Cap Program. To qualify for the ATS Market Maker Combined Media Activity Cap Program, a participant must: (1) qualify as a market maker on an ATS; (2) engage in both Executing Party and Contra Party activities; and (3) average at least 2,500 Media/Executing Party trades in a given Tape per day during a month.

If the participant meets the Media/Executing Party threshold, then the participant will pay for that month, on a per Tape basis, the lesser of $7,500 or the sum of all the participant’s combined monthly Executing Party and Contra Party fees for that Tape during the month (as calculated using the Standard Non-Comparison/Accept Media and Non-Media rates). If the participant’s average daily Media/Executing Party trade reports reach at least 5,000 in a given Tape in a given month, then the participant will no longer qualify for the ATS Market Maker Combined Media Activity Cap in that Tape in that month and, instead, will qualify for the Non-Comparison/Accept Cap program for that month. If the participant does not reach 2,500 Media/Executing Party trades in a given Tape per day during a month, the firm will be subject to the ATS Market Maker Media/Contra Party Cap fee schedule for that month.

As with the ATS Market Maker Media/Contra Party Cap, a participant may participate in the ATS Market Maker Combined Media Activity Cap program by maintaining a two-sided quote for each security that the FINRA member maintains interest in within each ATS, by displaying a quotation size of at least one normal unit of trading (specific for each security) and by attesting to its market maker qualification in an attestation form. The ATS Market Maker Combined Media Activity Cap attestation form is available on the FINRA/Nasdaq TRF Forms and Agreements page.

Retail Program

Nasdaq is implementing a new TRF participant category: Retail Participant. To qualify as a Retail Participant in the FINRA/Nasdaq TRF Carteret, the FINRA/Nasdaq TRF Chicago, or both (the “FINRA/Nasdaq TRFs”), substantially all of a participant’s trade reporting activity to the FINRA/Nasdaq TRF(s) in which it participates must comprise Retail Orders. To become a retail participant, a participant must complete and submit an application form, which is available on the FINRA/Nasdaq TRF Forms and Agreements page and be approved by the FINRA/Nasdaq TRF. Approved Retail Participants will not be impacted by the above pricing changes.

Note 1: Participants that use multiple Market Participant Identifiers or “MPIDs” for purposes of reporting to the FINRA/Nasdaq TRF in accordance with Rule 6160 will not be assessed a Participation Fee for each separate MPID.

FINRATM, Trade Reporting FacilityTM and TRFTM are trademarks of Financial Industry Regulatory Authority, Inc.; FINRA/NASDAQ TRFTM is used under license for Financial Industry Regulatory Authority, Inc..

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