Thursday, September 27, 2012
Equity Technical Update #2012 - 29
Additional FINRA/NASDAQ TRF System Updates to Support FINRA Trading Pause Rule; Effective October 23, 2012
What you need to know:
What is changing to support FINRA Rule 6121.01 (Trading Pauses)?
Currently, the FINRA/NASDAQ TRF rejects all current day reports of trades in securities subject to a trading pause under Rule 6121.01 where the execution time of the trade occurs while a trading pause is in effect. FINRA has requested the following additional changes to the TRF:
- During a trading pause, reports of trades in paused securities will only be rejected where the execution time is during the current trading pause that is in effect
- Once the trading pause ends for such securities, all current day trade reports will be accepted, including reports of trades with an execution time during the trading pause.
These changes will become effective October 23, 2012. Firms should modify their systems accordingly.
The following are examples of trade reports accepted and rejected after the changes become effective.
The same security is subjected to the following two trading pauses on the same trading day.
Trading Pause #1 Start Time: 10:01:01 Trading Pause #1 End Time: 10:06:01
Trading Pause #2 Start Time: 11:20:05 Trading Pause #2 End Time: 11:25:05
|Report Type||Submission Date||Submission Time||Trade Date||Execution Time||Accept/Reject|
|Regular||Current Date||10:02:00||Current Date||10:01:30||Reject|
|Correction or No/Was||Current Date||10:02:00||Current Date||10:01:30||Reject|
|Correction or No/Was||Current Date||10:02:00||Current Date||10:00:00||Accept|
|Cancellation||Current Date||10:02:00||Current Date||10:00:00||Accept|
|As Of/Correction||Current Date||10:02:00||Two Days Prior||Any Time||Accept|
|As Of/Cancellation||Current Date||10:02:00||Two Days Prior||Any Time||Accept|
|*Regular/Late Trade Report||Current Date||10:06:05 (after the first pause)||Current Date||10:01:05 (during the first pause)||Accept|
|*Correction||Current Date||10:06:05 (after the first pause)||Current Date||10:01:05 (during the first pause) (revised time)||Accept|
|*Regular/Late Trade Report||Current Date||11:20:10 (during the second pause)||Current Date||10:01:05 (during the first pause)||Accept|
|Regular||Current Date||11:20:10(during the second pause)||Current Date||11:25:00 (during the second pause)||Reject|
*These examples are changes from the current functionality.
Trades occurring after a trading pause is in effect pursuant to FINRA Rule 6121.01 may be deemed in violation of FINRA Rule 5260 (Prohibition on Transactions, Publication of Quotations, or Publication of Indications of Interest During Trading Halts) and will be deemed clearly erroneous.
Members are reminded that they must have policies and procedures in place that are reasonably designed to ensure that, among other things, members promptly cease effecting transactions during all trading halts, including trading pauses, as required by FINRA Rule 5260.
Is this change applicable to the FINRA OTC Reporting Facility (ORF)?
No, this change is not applicable to the ORF and is only applicable to reports of OTC trades in NMS stocks submitted to the FINRA/NASDAQ TRF.
Will NASDAQ OMX offer testing opportunities?
Yes, firms are able to test their systems daily in the NASDAQ OMX Test Facility (NTF). Testing will also be available during the upcoming User Acceptance Test (UAT) on Saturday, October 13, 2012. The securities below are currently set up in NTF for trading pauses. The list of securities subjected for the trading pauses during the Saturday October 13 UAT will be communicated in a subsequent notice.
|Symbol||Start Time (ET)||End Time (ET)|
Where can I find additional information?
- Contact NASDAQ OMX Subscriber Services at +1 212 231 5180.
- Contact NASDAQ OMX Trading Services to register for the test.
- Contact Legal Section, FINRA Market Regulation Department, at + 1 240 386 5126, or FINRA Office of General Counsel at +1 202 728 8071 for questions relating to FINRA rules.
- Contact Transaction Services U.S. Market Sales at +1 800 846 0477.
FINRATM, Trade Reporting FacilityTM and TRFTM are trademarks of Financial Industry Regulatory Authority, Inc.
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