Friday, October 12, 2012

Data Technical News #2012 - 27
Updated 11/2/2012: OTC Equity Securities Minimum Quotation Size Requirement Changes

Market Impacted:

  • FINRA OTC Bulletin Board (OTCBB)

Product Impacted:

  • Bulletin Board Dissemination Service (BBDS)

Contact Information:

What you need to know:

  • Updated 11/02/2012: Effective Monday, November 12, 2012, the Financial Industry Regulatory Authority (FINRA) will modify the OTC equity minimum quotation tier structure. The modification will not be implemented on November 5, 2012 as initially announced.
  • The Bulletin Board Dissemination Service (BBDS) messaging can support the new quotation tiers without modification.

What is changing?

Updated 11/02/2012: Effective Monday, November 12, 2012, FINRA will modify the OTC equity minimum quotation tier structure. FINRA will pilot the new tier structure for a minimum of one year, and will periodically review it to determine if the pilot tier changes should become permanent or be modified further. Under FINRA Rule 6433, every member firm that functions as a market maker in OTC equity securities by entering firm quotations into the OTC Bulletin Board Service (OTCBB) (or any other inter-dealer quotation system that permits quotation updates on a real-time basis) must honor those quotations for the minimum size defined.

What is the impact to the Bulletin Board Dissemination Service (BBDS) data feed?

There are no BBDS format or processing changes needed for the OTCBB minimum quotation size modification. As outlined in the BBDS specifications, FINRA disseminates the actual OTCBB market participant and Inside quotation size in units of trade. The Unit of Trade is communicated to the market data community via the OTCBB Symbol Directory and OTCBB Daily List files on OTCBB.com. As a general rule, the Unit of Trade should be 100 shares for OTCBB securities trading below $175.00 and 1 share for OTCBB securities trading at or above $175.00.

Where can I find the updated BBDS specification with the new OTCBB minimum quotation sizes?

The BBDS specifications are posted to the UTP/FINRA Data Products Specification page on the NASDAQ OMX Trader website and can be found here.

What is the impact to the Trade Data Dissemination Service (TDDS) data feed?

There are no TDDS format or processing changes needed for the OTCBB minimum quotation size modification. TDDS disseminates trade volume in actual shares for all OTCBB and OTC securities.

Will FINRA offer any testing opportunities for the OTCBB minimum quotation size change?

FINRA will conduct production User Acceptance Tests (UATs) from 9:00 a.m. to 12:00 p.m., Eastern Time (ET) on Saturday, October 13, 2012. These tests will allow participants to test the modifications to support the OTC equity minimum quotation tier structure. Data Vendors who process the BBDS data feed are encouraged to participate in the tests as transaction data entered into the system during the test will be disseminated via the feed.

Where can I find additional information?

Questions or comments regarding this implementation and its testing should be directed by email to FINRA Product Management or by phone to +1 866 899 2107.

FINRATM is a trademark of the Financial Industry Regulatory Authority, Inc.


Subscribe to Email Alerts:
NASDAQ OMX is offering customers the ability to self select news delivery across various NASDAQ OMX markets. Create and maintain a profile for updating alert preferences and contact information. Visit the enrollment form on the NASDAQ Trader website and sign up today! Please note that if you choose to unsubscribe from an email list, you may no longer receive potentially critical emails from the NASDAQ Stock Market regarding NASDAQ's trading and data products, regulatory issues or marketplace initiatives.