March 31, 2015


March 30, 2015

Financial Industry Regulatory Authority (FINRA) Proposes Rule Change that Would Require Reporting Over-the-Counter (OTC) Equity Transactions Within 10 Seconds

The Financial Industry Regulatory Authority has filed a proposed rule change requiring trades and trade cancellations in over-the counter (OTC) transactions in National Market System stocks and OTC equity securities (as defined in FINRA Rule 6420) that take place during normal market hours to be reported “as soon as practicable,” but no later than 10 seconds following execution or cancellation. Currently, FINRA trade reporting rules require members to report such trades and same-day trade cancellations within 30 seconds. FINRA also is proposing to adopt supplementary material to clarify the “as soon as practicable” requirement. In order to allow time for necessary systems changes, the proposed implementation date is between 120 and 180 days following the date of approval by the Securities and Exchange Commission. The SEC is accepting comments on FINRA’s proposed rule change on or before March 5, 2013. All submissions should refer to File No. SR–FINRA–2013–013.

Click here for the FINRA rule filing.

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About this Author

James D. Van De Graaff, Katten Muchin Law Firm, Financial Institutions Attorney

James D. Van De Graaff primarily represents broker-dealers, investment banks and market-making firms in the regulatory aspects of their business. He has more than 20 years of experience representing financial services clients in compliance reviews and training, mergers and acquisitions and responding to inquiries or investigations involving the US Securities and Exchange Commission (SEC) and securities self-regulatory organizations.

Staff Attorney

Tanja Samardzija concentrates her practice in financial services. Ms. Samardzija began her legal career as a litigator before embarking on a career in market regulation at the Chicago Board Options Exchange (CBOE). Ms. Samardzija’s work at the CBOE has familiarized her with a wide variety of regulatory matters including exchange and SEC investigations; compliance issues related to registrations, market making and options order handling; and risk management controls and supervisory procedures for brokers or dealers with market access. In addition to being thoroughly involved in...