2.2.6.1 Exchange-Listed Securities
FINRA may review any over-the-counter transaction involving an exchange-listed security on a FINRA trade reporting system, provided that the transaction meets certain price thresholds. FINRA may declare the transaction null and void if it determines one of the following:
- • The transaction is clearly erroneous
- • Such action is necessary for the maintenance of a fair and orderly market or the protection of investors and the public interest
Absent extraordinary circumstances, FINRA must take action within 30 minutes after becoming aware of the transaction. When extraordinary circumstances exist, action must be taken no later than the start of trading on the day following the date of execution under review.
If FINRA declares any transaction null and void, it must notify each party involved in the transaction as soon as practicable, and the aggrieved party may appeal, unless the number of the affected transactions is such that immediate finality is necessary to maintain a fair and orderly market or to protect investors and the public interest.
A transaction is clearly erroneous if its price differs from the reference price by an amount that equals or exceeds the thresholds below. The reference price is the consolidated last sale immediately prior to the execution under review, except for events involving: (1) 20 or more securities and (2) periods of extreme market volatility or sustained illiquidity.
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