finra rules definitions

Please include file number SRMEMX202311 on the subject line. Proposed Rule 11.22(b)(1)(A)(i) retains without substantive modification the existing rule with respect to the Limit Up-Limit Down Plan (current Rule 11.16(e)). The Exchange understands that all other non-Primary Listing Markets intend to file proposals that are substantially similar to this proposal. Importantly, the Exchange believes the proposal will not impose a burden on intermarket competition but will rather alleviate any burden on competition because it is the result of a collaborative effort by all SROs to harmonize and improve the process related to the halting and resumption of trading in U.S.-listed equity securities, consistent with the Amended Nasdaq UTP Plan. The term "sales practice event" means any customer complaint, arbitration, or civil litigation that has been reported to the Central Registration Depository, currently is required to be reported to the Central Registration Depository, or otherwise has been reported to FINRA. Register (ACFR) issues a regulation granting it official legal status. WebFINRA Rules means the Constitution, By-Laws, and Rules of Fair Practice of the Financial Industry Regulatory Authority, Inc. ("FINRA") and any interpretations thereof. Notwithstanding the development of these common standards, the Exchange will retain discretion in certain instances as to whether and how to handle halts, as is discussed below. establishing the XML-based Federal Register as an ACFR-sanctioned The Exchange believes that the proposed rule change is consistent with the provisions of Section 6(b) of the Act,[39] As is currently the case under the Nasdaq UTP Plan, all Regulatory Halt decisions are made by the market on which the security has its primary listing. Partial Amendment No. The definitions of UTP Exchange Traded Product, Pre-Market Session, and Post-Market Session are included in the definitions section with cross references to their current definitions in the Exchange's Rulebook. Amended by SR-NASD-2007-023 eff. In addition, the declaration and timing of trading halts and the resumption of trading is designed to avoid any advantage to those who can react more quickly than other participants. Financial Industry Regulatory Authority (FINRA) Definition For purposes of this definition, the claim amount includes claimed compensatory loss amounts only, not requests for pain and suffering, punitive damages or attorney's fees, and shall be the maximum amount for which the Associated Person or transferring member, as applicable, is potentially liable regardless of whether the claim was brought against additional persons or the Associated Person reasonably expects to be indemnified, share liability or otherwise lawfully avoid being held responsible for all or part of such maximum amount. The Exchange believes that implementation of these common standards will assist the SROs in maintaining fair and orderly markets. To help the Commission process and review your comments more efficiently, please use only one method. 45. supra In the Amended Nasdaq UTP Plan, Extraordinary Market Activity means a disruption or malfunction of any electronic quotation, communication, reporting, or execution system operated by, or linked to, the Processor or a Trading Center or a member of such Trading Center that has a severe and continuing negative impact, on a market-wide basis, on quoting, order, or trading activity or on the availability of market information necessary to maintain a fair and orderly market. See (ss) "Public Director" means a Director of the NASD Regulation Board or NASD Dispute Resolution Board who is not an Industry Director and who otherwise has no material business relationship with a broker or dealer or a self regulatory organization registered under the Act (other than serving as a public director of such a self regulatory organization); (tt) "Public Governor" or "Public committee member" means any Governor or committee member who is not the Chief Executive Officer of the Corporation or, during the Transitional Period, the Chief Executive Officer of NYSE Regulation, Inc., who is not an Industry Governor and who otherwise has no material business relationship with a broker or dealer or a self regulatory organization registered under the Act (other than serving as a public director of such a self regulatory organization); (uu) "registered broker, dealer, municipal securities broker or dealer, or government securities broker or dealer" means any broker, dealer, municipal securities broker or dealer, or government securities broker or dealer which is registered with the Commission under the Act; (vv) "Rules of the Corporation" or "Rules" means the numbered rules set forth in the manual of the Corporation beginning with the. Outside Regular Trading Hours, the Exchange may resume trading immediately after the SIP Halt Resume Time. Firm compliance professionals can access filings and requests, run reports and submit support tickets. [FR Doc. Definitions IM-1011-1. The definitions of SIP Halt Resume Time and SIP Halt are intended to provide additional guidance to address this subset of potential market issues. the Exchange). Regulatory Halt, Regular Trading Hours, SIP Halt, and SIP Halt Resume Time. The Exchange is adopting a modified form of the term Extraordinary Market Activity from the Amended Nasdaq UTP Plan, as described below. Federal Register. and certain parts of the complex process of reopening trading after a SIP Halt. In addition to SIP Halt, the Exchange is adopting the following terms from the Amended Nasdaq UTP Plan: Operating Committee, Operational Halt, Primary Listing Market, Processor, Regulatory Halt, Regular Trading Hours, and SIP Halt Resume Time, as discussed above. FINRA Rule Definition | Law Insider 94370 (March 7, 2022), 87 FR 14071 (March 11, 2022); Securities Exchange Act Release No. The Exchange proposes adding a definitions section as Rule 11.22(a) to consolidate the various definitions that will be used in the Rule, some of which are taken from the Amended Nasdaq UTP Plan. FINRAs mission is to protect Information about this document as published in the Federal Register. Federal Register provide legal notice to the public and judicial notice WebThe Financial Industry Regulatory Authority (FINRA) is the largest independent regulator for all securities firms doing business in the United States. Start Printed Page 43164 15 U.S.C. MEMBER APPLICATION AND ASSOCIATED PERSON REGISTRATION 1011. 36. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. Specifically, the Exchange proposes to remove the concept of a market-wide basis from the Amended Nasdaq UTP Plan's definition of Extraordinary Market Activity for purposes of the Exchange's Rules because the term Extraordinary Market Activity would only be used in the Exchange's Rules as a basis for the Exchange to initiate an Operational Halt, which would only occur on the market declaring the halt ( The new rule, which incorporates Section X.E.1 and X.F.3 of the Amended Nasdaq UTP Plan, is divided into the following two subsections concerning resumption of trading: (A) after a Regulatory Halt other than a SIP Halt; and (B) after a SIP Halt. The Exchange proposes to replace Rule 11.16, entitled Trading Halts Due to Extraordinary Market Volatility, with two new rules, Rules 11.22 and 11.23. For compliant use, a broker dealers testimonial Register, and does not replace the official print version or the official The Exchange is responsible for monitoring activity on its own markets, but also must honor a Regulatory Halt. 44. For example, just as a market disruption might trigger a Regulatory Halt for Extraordinary Market Activity (as defined in the Amended Nasdaq UTP Plan) if it affects multiple markets, so too a disruption at the Exchange, such as a technical issue affecting trading in one or more securities, could impact trading on the Exchange so significantly that an Operational Halt is appropriate in one or more securities. The Exchange proposes to add a definition of Regulatory Halt[26] 120/Friday, June 23, 2023/Notices 4 See also Commentary .06 to Rule 2.1210 (All Registered Persons Must Satisfy the Regulatory Element of Continuing Education). If the Commission takes such action, the Commission shall institute proceedings to determine whether the proposed rule change should be approved or disapproved. The Financial Industry Regulatory Authority (FINRA) has promulgated many rules that are designed to ensure fairness in the securities industry, protect the rights of When used in these By-Laws, unless the context otherwise requires, the term: (a) "Act" means the Securities Exchange Act of 1934, as amended; (b) "bank" means (1) a banking institution organized under the laws of the United States, (2) a member bank of the Federal Reserve System, (3) any other banking institution, whether incorporated or not, doing business under the laws of any State or of the United States, a substantial portion of the business of which consists of receiving deposits or exercising fiduciary powers similar to those permitted to national banks under the authority of the Comptroller of the Currency pursuant to the first section of Public Law 87-722 (12 U.S.C. Pursuant to Section 19(b)(1)[1] See 17 CFR 240.19b4. Last, the Exchange is updating cross references in other rules that are affected by the proposed changes. The Exchange uses the term UTP SIP herein when referring specifically to the SIP responsible for consolidation of information in Nasdaq-listed securities. An Operational Halt does not implicate other trading centers. It writes and enforces rules governing on the Exchange; or. 42. On July 1, 2020, the U.S. Financial Industry Regulatory Authority, Inc. (FINRA) issued For example, a disruption at the Exchange, such as a technical issue affecting trading in one or more securities, could impact trading on the Exchange so significantly that an Operational Halt is appropriate in one or more securities. 95069 (June 8, 2022), 87 FR 36018 (June 14, 2022). The Exchange, as a non-Primary Listing Market, does not itself declare trading pauses pursuant to the Limit Up-Limit Down Plan, but rather implements such pauses declared by Primary Listing Markets. For purposes of this definition, a severe and continuing negative impact on quoting, order, or trading activity includes (i) a series of quotes, orders, or transactions at prices substantially unrelated to the current market for the security or securities; (ii) duplicative or erroneous quoting, order, trade reporting, or other related message traffic between one or more Trading Centers or their members; or (iii) the unavailability of quoting, order, or transaction information for a sustained period. should verify the contents of the documents against a final, official The term "Director" means a member of the FINRA Regulation Board. In turn, in its recent rule filing, PHLX's proposed Rule 3100(b)(ii), which would state: The Exchange shall implement a trading halt due to extraordinary market volatility, as set forth in Rule 3101. See PHLX Proposal, Extraordinary Market Activity in proposed Rule 11.22(d) would have the meaning proposed by the Exchange, which is a modified form of the term from the Amended Nasdaq UTP Plan, as described above. the material on FederalRegister.gov is accurately displayed, consistent with In conjunction with adoption of an amended Nasdaq UTP Plan proposed by its participants (Amended Nasdaq UTP Plan),[6] In addition, securities may be listed on more than one listing exchange (dually listed). The Exchange has been working with other SROs to establish common criteria and procedures for halting and resuming trading in equity securities in the event of regulatory or operational issues. The Exchange is proposing to adopt Primary Listing Market as a new term, defined in Nasdaq UTP Plan, Section X.A.8, as follows: [T]he national securities exchange on which an Eligible Security is listed. 15. better and aid in comparing the online edition to the print edition. rule-comments@sec.gov. 17. See Report a concern about FINRA at 888-700-0028, Securities Industry Essentials Exam (SIE), Financial Industry Networking Directory (FIND). Each Plan participant shall continuously monitor communication protocols established by the Operating Committee and the Processor during market hours to disseminate notice of an Operational Halt, and the failure of a participant to do so shall not prevent the Exchange from initiating an Operational Halt. Securities Exchange Act Release No. informational resource until the Administrative Committee of the Federal These tools are designed to help you understand the official document 78s(b)(3)(A). I. The Amended Nasdaq UTP Plan includes provisions requiring participant self-regulatory organizations (SROs) to honor a Regulatory Halt declared by the Primary Listing Market. to Rule 11.22(a), which will have the same meaning as in the Amended Nasdaq UTP Plan, Section X.A.8. 92a), and which is supervised and examined by a State or Federal authority having supervision over banks, and which is not operated for the purpose of evading the provisions of the Act, and (4) a receiver, conservator, or other liquidating agent of any institution or firm included in clauses (1), (2), or (3) of this subsection; (c) "Board" means the Board of Governors of the Corporation; (d) "branch office" means an office defined as a branch office in the Rules of the Corporation; (e) "broker" means any individual, corporation, partnership, association, joint stock company, business trust, unincorporated organization, or other legal entity engaged in the business of effecting transactions in securities for the account of others, but does not include a bank; (f) "Closing" means the closing of the consolidation of certain member firm regulatory functions of NYSE Regulation, Inc. and the Corporation; (g) "Commission" means the Securities and Exchange Commission; (h) "controlling" shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person, whether through the ownership of voting stock, by contract or otherwise. SIP outage means a situation in which the Processor has ceased, or anticipates being unable, to provide updated and/or accurate quotation or last sale price information in one or more securities for a material period that exceeds the time thresholds for an orderly failover to backup facilities established by mutual agreement among the Processor, the Primary Listing Market for the affected securities, and the Operating Committee unless the Primary Listing Market, in consultation with the Processor and the Operating Committee, determines that resumption of accurate data is expected in the near future. In addition, several other definitions have been moved into the definitions section from elsewhere in the current rule without changes in the definitions. The third set of new proposed definitions would be specific to events involving the SIP. Last, consistent with Section X.G of the Nasdaq UTP Plan, the Exchange is proposes to add Rule 11.22(c), which will more broadly require the Exchange to halt trading of a UTP security if the Primary Listing Market declares a Regulatory Halt in that security, and more specifically, governs trading halts in certain Exchange Traded Products traded on the Exchange pursuant to unlisted trading privileges during pre-market, regular trading hours, and post-market sessions. Page 3 of 19 - FINRA.org the official SGML-based PDF version on govinfo.gov, those relying on it for 552, will be available for website viewing and printing in the Commission's Public Reference Room, 100 F Street NE, Washington, DC 20549, on official business days between the hours of 10 a.m. and 3 p.m. [18] 12. Proposed Rule 11.22(d)(3)(C) provides that trading in a halted security shall resume at the time specified by the Exchange in a notice. The Exchange proposes to define the terms SIP Halt Resume Time and SIP Halt to have the same meaning as in the Amended Nasdaq UTP Plan. The Exchange does not intend for these proposals to have any competitive impact whatsoever. Because market participants often trade the same security across multiple venues and trade securities listed on different exchanges as part of a common strategy, the Exchange believes that the proposed rules will lessen the risk that market participants holding a basket of securities will have to deal with divergent outcomes depending on where the securities are listed or traded. Proposed Rule 11.22(d) would authorize the Exchange to implement an Operational Halt for any security trading on the Exchange: (i) if it is experiencing Extraordinary Market Activity on the Exchange; or (ii) when otherwise necessary to maintain a fair and orderly market or in the public interest. note 13. i.e. 7. 25. This is consistent with the Amended Nasdaq UTP Plan. The Exchange notes that The Nasdaq Stock Market, LLC (Nasdaq), filed a similar proposed rule change with the Commission. The Exchange does not believe that its proposals concerning Operational Halts impose an undue burden on competition. WebFINRA Communication Rules Rule 2210 governs three categories of communications by FINRA member firms: institutional communications, retail communications and . These provisions outline the processes related to Market-Wide Circuit Breaker halts. ARTICLE I DEFINITIONS | FINRA.org See In practice, the Exchange has always had the capacity to implement operational halts in specified circumstances. rendition of the daily Federal Register on FederalRegister.gov does not The OFR/GPO partnership is committed to presenting accurate and reliable In addition to establishing common criteria and procedures for halting and resuming trading in equity securities in the event of regulatory or operational issues, the Exchange is moving current Rule 11.16 into Rules 11.22 and Rule 11.23 in order to reorganize the rule to improve its overall clarity. 41. See FINRA means 43. Disclaimer: The summary and detailed topics are only available for, FINRA operates the largest securities dispute resolution forum in the United States, To report on abuse or fraud in the industry. These can be useful Exchange Rules 11.1(c) and 11.16(d). Send paper comments in triplicate to Secretary, Securities and Exchange Commission, 100 F Street NE, Washington, DC 205491090. Proposed Rule 11.22(d)(3)(A) provides that the Exchange would resume trading when it determines that trading may resume in a fair and orderly manner consistent with the Exchange's rules. For purposes of this definition, a severe and continuing negative impact on quoting, order, or trading activity includes (i) a series of quotes, orders, or transactions at prices substantially unrelated to the current market for the security or securities; (ii) duplicative or erroneous quoting, order, trade reporting, or other related message traffic between one or more Trading Centers or their members; or (iii) the unavailability of quoting, order, or transaction information for a sustained period. Investment and Securities Account Restrictions Under FINRA's See on NARA's archives.gov. Material SIP latency means a delay of quotation or last sale price information in one or more securities between the time data is received by the Processor and the time the Processor disseminates the data over the Processor's vendor lines, which delay the Primary Listing Market determines, in consultation with, and in accordance with, publicly disclosed guidelines established by the Operating Committee, to be (a) material and (b) unlikely to be resolved in the near future. 15 U.S.C. See proposed Rule 11.22(a)(9). By addressing both concerns, the Exchange believes that the proposed rules further the Act's goal of maintaining fair and orderly markets. Coordination with the MSRB Up 0170. headings within the legal text of Federal Register documents. has no substantive legal effect. Each transaction reporting plan has a securities information processor (SIP) responsible for consolidation of information for the plan's securities, pursuant to Rule 603 of Regulation NMS. when otherwise necessary to maintain a fair and orderly market or in the public interest. 17 CFR 240.19b4(f)(6). FINRA Seeks to Allow Private Homes as Non-Branch Offices FINRA IS A REGISTERED TRADEMARK OF THE FINANCIAL INDUSTRY REGULATORY AUTHORITY, INC. 30. and Rule 11.16(h)(j). As part of these changes, the Exchange will amend categories of regulatory and operational halts, adopt defined terms from the Amended Nasdaq UTP Plan and move current Rule 11.16 into Rules 11.22 and 11.23 for clarity and organizational purposes. WebFINRA Rules 0100. that agencies use to create their documents. Specifically, the Exchange has proposed to define Regulatory Halt to mean a halt declared by the Primary Listing Market in trading in one or more securities on all Trading Centers for regulatory purposes, including for the dissemination of material news, news pending, suspensions, or where otherwise necessary to maintain a fair and orderly market. Securities Exchange Act Release No. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons.

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