Friday, September 14, 2012

General News #2012 - 2
FINRA/NASDAQ TRF Short Sale and Short Sale Exempt Trade Reports

What is being announced?

Effective January 30, 2012, the FINRA/NASDAQ Trade Reporting Facility^TM (TRF^TM) made a change regarding the submission of short sale trade reports into the NASDAQ ACT System using the FIX protocol.

Prior to the change, in very limited circumstances, short sale and short sale exempt trades reported to the FINRA/NASDAQ TRF may not have reflected the intentions of the parties to the trade. In cases where a member firm submitted certain combinations of data regarding short sale designation that were inconsistent with stated FIX protocol specifications, the protocol interpreted the submission in accordance with certain parameters programmed into the protocol. If the interpretation did not reflect the parties' intentions, the member firm may have incurred additional FINRA/NASDAQ TRF fees in correcting the trades.

As of January 30, 2012, the TRF rejects any short sale or short sale exempt trade reports containing invalid data combinations.

What action should firms take?

If your firm used the FIX protocol to submit short sale or short sale exempt trades from January 3, 2011, to January 27, 2012, and used invalid data combinations that resulted in an interpretation that did not reflect the parties' intention, your firm may be eligible for a billing adjustment*.

If your firm intends to request a billing adjustment, contact Athena Lai at +1 301 978 5262 or Transaction Services U.S. Market Sales at +1 800 846 0477 by October 12, 2012. Your firm will need to submit supporting documentation by November 23, 2012.

What is the supporting documentation?

Member firms should submit the following:

• A completed TRF Form signed by an authorized person at the member firm.
• Supporting documentation must contain the Trade Report Date, ACT Control Number, FIX Tag 54 input value, and FIX Tag 853 input value of the following TRF trade reports submitted between January 3, 2011, and January 27, 2012:
• Original trade report submitted via FIX where the interpretation did not accurately reflect the parties' intention.
• Same day trade report correction to the original trade report.
• Corrected or "As of" trade report to the original trade report.

Supporting documentation must be provided using the template provided by NASDAQ OMX^® and contain the above details of the original trade and details of the corresponding corrected trade report. Each file should not be larger than 10 MB size.

The completed signed form(s) and supporting documentation should be emailed to tradingtools@nasdaqomx.com by November 23, 2012. If the files are too large to be sent electronically, the completed form(s) and the file in a CD-ROM or USB drive can be mailed to NASDAQ OMX with a postmark no later than November 23, 2012.

Where can I find additional information?

• Contact Athena Lai, Transaction Services, U.S. at +1 301 978 5262.

*The maximum billing adjustment for the FINRA/NASDAQ TRF and ORF combined is $100,000 per firm in regard to this issue.

FINRA^TM, Trade Reporting Facility^TM and TRF^TM are trademarks of Financial Industry Regulatory Authority, Inc.