reporting

Exam Alert: FINRA Adds Additional FOCUS Report Supplement

Effective December 31, 2014, certain firms that are required to file FOCUS reports will be required to file an additional form called the Supplemental Inventory Schedule. Continue reading

Effective December 31, 2014, certain firms that are required to file FOCUS reports will be required to file an additional form called the Supplemental Inventory Schedule. On this form, firms report their gross long and short inventory positions in specified categories of securities and commodities. The requirement does not apply to firms that have (1) a minimum dollar net capital or liquid capital requirement of less than $100,000 or (2) inventory positions consisting only of money market mutual funds.

Source: FINRA Regulatory Notice 14-43: SEC Approves Supplemental Inventory Schedule

This alert applies to the Series 26 and Series 99.

Exam Alert: FINRA Revises ADF Market Participant Registration Rules

Effective February 3, 2014, FINRA has implemented changes to the requirements for registering as an Alternative Display Facility (ADF) market participant. An applying firm must now agree to submit an ADF Deposit Amount, execute a Participant Agreement with FINRA, and execute a Certification Record. Continue reading

Effective February 3, 2014, FINRA has implemented changes to the requirements for registering as an Alternative Display Facility (ADF) market participant. An applying firm must now agree to submit an ADF Deposit Amount of $250,000 into escrow (raised to $500,000 under certain conditions). The firm may lose some of the deposit if they fail to submit at least 75% of its quoting or trading volume to the ADF. The firm must also provide monthly projections of the volume of data it expects to submit to the ADF.

The rule provides for ways to earn back the deposit. The rule also specifies what happens to the deposit if the firm is sold, stops doing business, or fails to become or remain an ADF market participant.

A firm seeking registration as an ADF market participant must also execute a Participant Agreement with FINRA and execute a Certification Record. The Certification Record has the firm attest that it can comply with certain requirements of Regulation NMS.

Source: FINRA Regulatory Notice 14-04: SEC Approves Amendments to FINRA Rules 6271 and 6272 Regarding the Requirements For Firms Seeking Registration as FINRA Alternative Display Facility (ADF) Market Participants

This alert applies to the Series 7, Series 55, and Series 62.

Exam Alert: FINRA provides reporting exceptions to avoid duplicative filings, permits online filing

FINRA will let members:
-avoid needing to independently report information that is already contained on Form U4
-avoid needing to independently report actions that FINRA takes against firms and agents
-file required copies of criminal complaints, civil complaints, and arbitration claims online Continue reading

Effective March 4, 2013, FINRA will let members avoid needing to independently report information that is already contained on Form U4. FINRA will also implement an exception for reporting regulatory actions that FINRA takes against firms and associated persons (since FINRA will already have the details of the action on file).

Effective July 1, 2013, FINRA will let firms file required copies of criminal complaints, civil complaints, and arbitration claims online.

Source: FINRA Regulatory Notice 13-08: FINRA Amends Rule 4530 to Eliminate Duplicative Reporting and Provide the Option to File Required Documents Online Using a New Form

This alert applies to the Series 7, Series 24, Series 26, Series 62, Series 79, Series 82, and Series 99.

Exam Alert: FINRA launches data feed for securitized products, gives reminder about TRACE changes

Effective November 5, 2012, FINRA will launch the Securitized Products Dissemination Service (SPDS), which will act as a data feed for TRACE-eligible securitized products. FINRA also reminds firms of the changes to certain trade reporting and dissemination requirements set to take effect November 5, 2012. Continue reading

Effective November 5, 2012, FINRA will launch the Securitized Products Dissemination Service (SPDS), which will act as a data feed for TRACE-eligible securitized products. SPDS will provide real-time last sale data and other transaction information. SPDS, in its initial implementation, will only disseminate information for transactions in agency pass-through mortgage-backed securities that are traded to be announced (TBA).

FINRA also reminds firms of the changes to certain trade reporting and dissemination requirements set to take effect November 5, 2012. These changes apply to transactions in TRACE-eligible securities that are agency pass-through mortgage-backed securities that are traded to be announced (TBA transactions). For additional details, please see the prior exam alert on this change.

Source: Amendments to TRACE Reporting Requirements and Dissemination of Agency Pass-Through Mortgage-Backed Securities Traded To Be Announced

This alert applies to the Series 7, Series 24, and Series 62.

Exam Alert: FINRA amends TRACE rules for TBA transactions

A To Be Announced (TBA) transaction is a transaction in an Agency Pass-Through Mortgage-Backed Security. Effective November 5, 2012, TRACE rules and dissemination protocols regarding TBA transactions will be changed in the following ways… Continue reading

-FINRA will disseminate information on TBA transactions immediately after receiving a transaction report.

-TBA transactions for which good delivery may be made (TBA transactions GD) will be disseminated subject to a $25 million dissemination cap.

-TBA transactions in products that are not traded for good delivery (TBA transactions NGD) will be disseminated subject to a $10 million dissemination cap.

-TBA transactions GD must generally be reported within 45 minutes of execution.

-TBA transactions NGD must generally be reported within 120 minutes of execution.

Effective May 11, 2013, the reporting window for TBA transactions will be reduced to 15 minutes for TBA transactions GD and to 60 minutes for TBA transactions NGD.

Source: FINRA Regulatory Notice 12-26

This alert applies to the Series 7, Series 24, and Series 62.

Exam Alert: Large traders must identify themselves to the SEC

The SEC has adopted rules that require “large traders” to register with the Commission and receive unique identification numbers. The traders must then Continue reading

The SEC has adopted rules that require “large traders” to register with the Commission and receive unique identification numbers. The traders must then provide their broker-dealers with their ID numbers when they make trades, and the broker-dealers must record the ID numbers as part of their recordkeeping and transaction reporting requirements. A “large trader” is a “person whose transactions in exchange-listed securities equal or exceed two million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month.” Relevant to the Series 79, 62, 55, 7, 26, and Series 24 exams.

Source: SEC Release 2011-154

Further Reading: Analysis by the Securities Technology Monitor

Exam Alert: FINRA to track trades in all listed US stocks

Effective July 11, 2011, FINRA will start a three-phase plan to track trades in all listed US stocks. Trades will be tracked using Continue reading

Effective July 11, 2011, FINRA will start a three-phase plan to track trades in all listed US stocks. Trades will be tracked using the Order Audit Trail System (OATS), which is currently used in recording and reporting trades on NASDAQ and in OTC equity securities. Relevant to Series 7, Series 24 and Series 62 exams.

http://www.finra.org/Industry/Regulation/Notices/2011/P122786