[Federal Register Volume 78, Number 96 (Friday, May 17, 2013)]
[Notices]
[Pages 29190-29193]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2013-11714]


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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-69561; File No. SR-FINRA-2013-013]


Self-Regulatory Organizations; Financial Industry Regulatory 
Authority, Inc.; Order Approving the Proposed Rule Change, as Modified 
by Amendment No. 1, To Require Members To Report OTC Equity 
Transactions as Soon as Practicable, But No Later Than 10 Seconds, 
Following Execution

May 13, 2013.

I. Introduction

    On February 1, 2013, Financial Industry Regulatory Authority, Inc. 
(``FINRA'') filed with the Securities and Exchange Commission 
(``Commission''), pursuant to Section 19(b)(1) of the Securities 
Exchange Act of 1934 (``Act'') \1\ and Rule 19b-4 thereunder,\2\ a 
proposed rule change to require that members report over-the-counter 
(``OTC'') transactions in NMS stocks and OTC Equity Securities,\3\ and 
cancellations of such transactions, to FINRA as soon as practicable, 
but no later than 10 seconds, following execution (or cancellation, as 
applicable). The proposed rule change was published for comment in the 
Federal Register on February 12, 2013.\4\ The Commission received five 
comment letters in response to the proposed rule change.\5\ On May 7, 
2013 FINRA responded to the comment letters and filed Amendment No. 1 
to the proposed rule change.\6\ This order approves the proposed rule 
change, as modified by Amendment No. 1.
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    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ OTC transactions in NMS stocks, as defined in SEC Rule 
600(b) of Regulation NMS, are reported through the Alternative 
Display Facility (``ADF'') or a Trade Reporting Facility (``TRF''), 
and transactions in ``OTC Equity Securities,'' as defined in FINRA 
Rule 6420 (i.e., non-NMS stocks such as OTC Bulletin Board and OTC 
Market securities), are reported through the OTC Reporting Facility 
(``ORF''). The ADF, TRFs and ORF are collectively referred to herein 
as the ``FINRA Facilities.''
    \4\ See Securities Exchange Act Release No. 68842 (February 6, 
2013), 78 FR 9963 (``Notice'').
    \5\ See Letter from Christopher Nagy, President, KOR Trading LLC 
to Elizabeth M. Murphy, Secretary, Commission, dated March 5, 2013 
(``KOR Letter''); Letter from David J. Amster, Chief Compliance 
Officer, CRT Capital Group to the Commission, dated March 5, 2013 
(``CRT Letter''); Letter from David S. Sieradzki, Partner, Bracewell 
& Giuliani LLP on behalf of GFI Securities LLC to Elizabeth M. 
Murphy, Secretary, Commission, dated March 5, 2013 (``GFI Letter''); 
Letter from Manisha Kimmel, Executive Director, Financial 
Information Forum to Elizabeth M. Murphy, Secretary, Commission, 
dated March 6, 2013 (``FIF Letter''); and Letter from Theodore R. 
Lazo, Managing Director and Associate General Counsel, Securities 
Industry and Financial Markets Association to Elizabeth M. Murphy, 
Secretary, Commission, dated March 18, 2013 (``SIFMA Letter'').
    \6\ See Letter from Stephanie Dumont, Senior Vice President and 
Director of Capital Markets Policy, FINRA to the Commission dated 
May 7, 2013 (``FINRA Response''). See also Amendment No. 1 dated May 
7, 2013 (FINRA proposed to adopt Supplementary Material to provide 
it will take such factors as the complexity and manual nature of the 
execution and reporting of the trade into consideration in 
determining whether ``reasonable justification'' exists to excuse 
what otherwise may be deemed to be a pattern or practice of late 
trade reporting). (``Amendment No. 1''). Because Amendment No. 1 is 
technical in nature, it is not subject to notice and comment.
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II. Description of the Proposal

    FINRA trade reporting rules currently require that members report 
OTC transactions in NMS stocks and OTC Equity Securities that are 
executed during the hours that the FINRA Facilities are open within 30 
seconds of execution.\7\ In addition, members must report the 
cancellation of a trade within 30 seconds of the time of cancellation 
if the trade is both executed and cancelled on the same day during 
normal market hours.\8\ Under current FINRA guidance, members are 
expected to report transactions as soon as practicable and would 
violate the rule if they withhold trade reports, e.g., by programming 
their systems to delay reporting until the last permissible second.\9\
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    \7\ See, e.g., FINRA Rules 6282(a), 6380A(a), 6380B(a) and 
6622(a).
     The TRFs and ORF are open between 8:00 a.m. and 8:00 p.m., and 
the ADF is open between 8:00 a.m. and 6:30 p.m.
    \8\ See, e.g., FINRA Rules 6282(j)(2)(A), 6380A(g)(2)(A), 
6380B(f)(2)(A) and 6622(f)(2)(A).
     Members must report all cancellations of previously reported 
trades to FINRA; however, where the trade is executed or canceled 
outside of normal market hours, the 30-second requirement does not 
apply to the reporting of the cancellation.
    \9\ See FINRA Regulatory Notice 10-24 (April 2010).
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    FINRA proposed to amend its trade reporting rules to require 
members to report OTC transactions in NMS stocks and OTC Equity 
Securities as soon as practicable, but no later than 10 seconds, 
following execution and to report trade cancellations as soon as 
practicable, but no later than 10 seconds, after the time of 
cancellation.\10\ Under the proposed rule change, all transactions not 
reported within 10 seconds will be marked late (unless expressly 
subject to a different reporting requirement \11\ or excluded from the 
trade reporting rules altogether). In the filing, FINRA stated that it 
understands that there will be isolated instances where a member is 
unable to report trades within the time period prescribed by rule, and 
FINRA will continue to look for a pattern or practice \12\ of unexcused 
late trade reporting before taking action against a member. Pursuant to 
FINRA Rules 6181 and 6623, unexcused late reporting occurs when there 
are ``repeated reports of executions submitted after the required time 
period without reasonable justification or exceptional circumstances.'' 
The rules also provide that ``[e]xceptional circumstances will be 
determined on a case-by-case basis and may include instances of system 
failure by a member or service bureau, or unusual market conditions, 
such as extreme volatility in a security, or in the market as a 
whole.''
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    \10\ FINRA also is proposing conforming changes to replace the 
reference to 30 seconds with 10 seconds in the rules relating to the 
reporting of stop stock and ``prior reference price'' transactions. 
See FINRA Rules 6282(a)(4), 6380A(a)(5), 6380B(a)(5) and 6622(a)(5).
    \11\ For example, the proposed rule change will not amend the 
reporting requirements applicable to transactions in Restricted 
Equity Securities, as defined in Rule 6420, effected under 
Securities Act Rule 144A, which transactions currently are not 
subject to the 30-second reporting requirement. See Rule 6622(a)(3).
    \12\ See, e.g., FINRA Rule 6282. See also Amendment No. 1.
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    FINRA also proposed to adopt Supplementary Material to clarify the 
requirement that members report trades and trade cancellations ``as 
soon as practicable.'' Specifically, the proposed Supplementary 
Material provides that members must adopt policies and procedures 
reasonably designed to achieve compliance with this requirement and 
must program systems to commence the trade reporting process without 
delay upon execution (or cancellation, as applicable). Where a member 
has such reasonably designed policies, procedures and systems in place, 
the member will not be viewed as violating the ``as soon as 
practicable'' requirement because of delays in trade reporting that are 
due to external factors so long as the member does not purposely delay 
the reporting of the trade. The proposed Supplementary Material also 
expressly prohibits members from purposely withholding trade reports, 
e.g., by programming their systems to delay reporting until the last 
permissible second. FINRA notes that members that engage in a pattern 
and practice \13\ of unexcused late reporting (i.e., reporting later 
than 10 seconds

[[Page 29191]]

after execution) may be charged with violating FINRA rules, 
notwithstanding that they have policies and procedures that contemplate 
commencing the trade reporting process without delay.\14\
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    \13\ Id.
    \14\ FINRA will announce the effective date of the proposed rule 
change in a Regulatory Notice with an implementation period of 120 
to 180 days following Commission approval.
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III. Summary of Comment Letters and FINRA's Response

    The Commission received five comment letters on the proposed rule 
change.\15\ One commenter supported the proposed rule change.\16\ KOR 
stated that in today's automated market structure, 10 seconds 
represents a significant amount of time given ``that the exchanges and 
trading firms commonly measure performance in microseconds.'' KOR 
stated that complying with this requirement should not represent an 
undue burden on reporting firms. The other four commenters raised 
concerns relating to the proposed rule change.
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    \15\ See note 5, supra.
    \16\ See KOR Letter.
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A. Manually Negotiated and Reported Trades

    Four commenters raised concerns about the possible impact of the 
proposed rule change on trades that are manually negotiated and 
reported.\17\ These commenters stated that while manual trading 
represents a very small percentage of equity trade reporting, for these 
types of trades, a trader may not be able to manually input and verify 
trade data within 10 seconds.\18\ One commenter asserted that the 
proposed rule change will disproportionately affect firms that accept 
orders that are not electronically entered into an order management 
system (including orders received via telephone or instant message) and 
will effectively prohibit, by trade reporting rule, an entire category 
of otherwise appropriate transactions.\19\
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    \17\ See GFI Letter, CRT Letter, FIF Letter and SIFMA Letter.
    \18\ Id.
    \19\ See GFI Letter.
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    FINRA responded that it believes that the proposed rule change is 
necessary to bring the trade reporting rules in line with current 
industry practice, as the market becomes more automated and more 
efficient.\20\ Under the proposed rule change, members must have 
policies and procedures reasonably designed to enable them to comply 
with the ``as soon as practicable'' requirement and must program 
systems to commence the trade reporting process without delay upon 
execution. Where a member has such reasonably designed policies, 
procedures and systems in place, the member will not be viewed as 
violating the ``as soon as practicable'' requirement because of delays 
in trade reporting that are due to extrinsic factors that are not 
reasonably predictable and where the member does not purposely delay 
the reporting of the trade.\21\ FINRA further stated that members that 
engage in a pattern or practice of unexcused late reporting (i.e., 
reporting later than 10 seconds after execution) may be charged with 
violating FINRA rules, notwithstanding that they have policies and 
procedures that contemplate commencing the trade reporting process 
without delay.
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    \20\ See FINRA Response.
    \21\ In Amendment No. 1, FINRA proposed to amend and further 
clarify the text of the Supplementary Material proposed in the 
original filing. FINRA proposed to delete the word ``generally'' and 
to change ``external factors'' to ``extrinsic factors that are not 
reasonably predictable.''
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    FINRA also noted that the universe of trades for which trade 
details must be entered manually is small, but in Amendment No. 1 
proposed to adopt Supplementary Material to provide that in these 
cases, FINRA will take such factors as the complexity and manual nature 
of the execution and reporting of the trade into consideration in 
determining whether ``reasonable justification'' exists for what 
otherwise might be deemed to be a pattern or practice of late trade 
reporting.\22\ FINRA noted that the proposed Supplementary Material 
would apply only where the details of a trade must be manually entered 
or typed into a trade reporting system following execution.
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    \22\ Pursuant to Rules 6181 and 6623, unexcused late reporting 
occurs when there are ``repeated reports of executions submitted 
after the required time period without reasonable justification or 
exceptional circumstances.'' In Amendment No. 1, FINRA also proposed 
to amend Rules 6282(a)(6), 6380A(a)(4), 6380B(a)(4) and 6622(a)(4) 
to include the words ``reasonable justification'' to conform to 
Rules 6181 and 6623.
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B. Benefits of Proposed Rule Change

    Three commenters questioned whether the benefits outweigh the costs 
of the proposed rule change, given that the vast majority of trades are 
reported within 10 seconds already.\23\ One of the commenters further 
stated that the proposed rule change should not be approved without a 
specific regulatory justification and a thoughtful economic 
analysis.\24\
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    \23\ See GFI Letter, FIF Letter and SIFMA Letter.
    \24\ See SIFMA Letter. The Commission notes that in the proposal 
FINRA stated that it does not believe that the proposed rule change 
will result in any burden on competition that is not necessary or 
appropriate in furtherance of the purposes of the Act.
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    FINRA responded that it believes that the reasons discussed in the 
original filing support approval of the proposed rule change,\25\ 
including the potential effect of the current 30-second reporting 
requirement on the calculation of reference prices under the Limit Up/
Limit Down Plan,\26\ and the fact that trade reports received 30 
seconds after execution are more likely to appear to market 
participants as violations of the Limit Up/Limit Down Plan and the 
Order Protection Rule (i.e., trading at a price worse than the best 
displayed bid or offer, commonly referred to as a ``trade-
through'').\27\ Additionally, FINRA stated that the proposed rule 
change will give market participants greater certainty that any trade 
disseminated as timely reported was executed within the prior 10 
seconds, in furtherance of the policy objectives underlying the 
proposed rule change. FINRA noted that under the 30 second reporting 
requirement, market participants cannot distinguish among trades 
reported 10, 20, or 29 seconds after execution, so it is not possible 
to know if a particular trade reflects the current market for the 
security. FINRA believes that with the accommodation for manual 
reporting processes discussed above, the proposed rule change strikes a 
reasonable balance between promoting the goals of increased automation 
and efficiency in the marketplace and minimizing the potential burden 
on member firms of having to make changes to comply with the 10 second 
reporting requirement.
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    \25\ See FINRA Response.
    \26\ See Securities Exchange Act Release No. 67091, 77 FR 33498 
(June 6, 2012) (File No. 4-631) (as originally approved, the 
National Market System Plan to Address Extraordinary Market 
Volatility, i.e., the Limit Up/Limit Down Plan).
    \27\ 17 CFR 242.611.
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C. Member Firm Compliance With 10-Second Reporting Requirement During 
High Volume Periods

    Two commenters raised potential queuing issues and question whether 
firms will be able to comply with the proposed 10-second reporting 
requirement during regularly occurring periods of high volume such as 
market open and close, during highly subscribed initial public 
offerings (``IPOs'') or when a firm is reporting basket trades with a 
large number of securities.\28\
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    \28\ See FIF Letter and SIFMA Letter.
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    FINRA responded that under current FINRA Rules 6181 and 6623, 
unusual market conditions, such as extreme volatility in a security or 
in the market as a whole, may be considered in determining whether 
reasonable

[[Page 29192]]

justification or exceptional circumstances exists for the late trade 
reporting.\29\ FINRA reiterated that firms are expected to have 
sufficiently robust systems with adequate capacity to enable them to 
report within the time frame prescribed by FINRA rules, including 
during particularly high volume periods such as market open and close. 
Absent extraordinary circumstances or reasonable justification, a 
pattern or practice of late trade reporting, for example, at market 
open generally would not be considered ``excused'' under FINRA rules. 
FINRA stated that to create a separate standard for trade reporting at 
market open and close, as one commenter suggested,\30\ or to otherwise 
excuse late trade reporting during such periods, would permit trade 
reports to be less clearly sequenced at times when transaction 
information is most important to investors and market participants. 
FINRA stated that this could obscure undesirable trading patterns such 
as gaming or other forms of market abuse. In addition, according to 
FINRA, such an approach would fail to provide firms with the 
appropriate incentive to devote sufficient resources to trade reporting 
as promptly as possible during such periods. FINRA concluded that firms 
must take reasonable steps to ensure that they can report trades within 
10 seconds.\31\
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    \29\ The rules state that ``[e]xceptional circumstances will be 
determined on a case-by-case basis and may include instances of 
system failure by a member or service bureau, or unusual market 
conditions, such as extreme volatility in a security, or in the 
market as a whole.'' In its response, FINRA noted that one example 
of unusual market conditions could be the day of the Russell 
rebalancing. See FINRA Response.
    \30\ See FIF Letter.
    \31\ In response to the comment regarding IPOs, FINRA noted 
that, to date, FINRA has not observed a negative effect on trade 
reporting compliance rates during time periods surrounding highly 
subscribed IPOs and believes that this will continue to be the case 
under the proposed rule change.
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D. Member Firm Compliance With 10-Second Reporting Requirement 
Following Migration to FINRA's Multi-Product Platform (``MPP'')

    One commenter questioned whether firms will be able to comply with 
the proposed 10-second reporting requirement when reporting trades to 
the ORF \32\ following migration to FINRA's new MPP and asserted that 
introducing new trade reporting requirements before the migration is 
premature.\33\
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    \32\ The Commission notes that the commenter's more general 
comments regarding ORF migration to the MPP are not germane to this 
filing and are not addressed here.
    \33\ See FIF Letter.
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    FINRA responded that it did not believe that the planned migration 
of the ORF to the new MPP infrastructure would affect the ability of a 
firm's automated trade reporting systems to comply with the proposed 
rule change. According to FINRA, if a firm's systems currently are 
capable of reporting within 10 seconds, there is nothing about the new 
platform that would impede this process. In addition, FINRA believes 
that the proposed implementation period of 120 to 180 days following 
Commission approval will provide sufficient time for firms to make and 
test any systems changes that may be required to comply with the 
proposed rule change. In addition, FINRA recently announced a new 
timeframe for the migration of the ORF to the MPP which will occur in 
early 2014.\34\ FINRA stated that this schedule change should further 
alleviate members' concerns regarding the timing of implementation of 
the proposed rule change. Accordingly, FINRA does not believe that 
implementation of the proposed rule change should be delayed pending 
migration of the ORF to the MPP.
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    \34\ See http://www.finra.org/Industry/Compliance/MarketTransparency/ORF/Notices/P239727.
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IV. Discussion and Commission Findings

    After carefully considering the proposal, the comments submitted, 
and FINRA's response to the comments, the Commission finds that the 
proposed rule change, as modified by Amendment No. 1, is consistent 
with the requirements of the Act and the rules and regulations 
thereunder applicable to a national securities association.\35\ In 
particular, the Commission finds that the proposed rule change is 
consistent with Section 15A(b)(6) of the Act,\36\ which requires, among 
other things, that FINRA rules be designed to prevent fraudulent and 
manipulative acts and practices, to promote just and equitable 
principles of trade, and, in general, to protect investors and the 
public interest. The Commission has considered the commenters' views on 
the proposed rule change and believes that FINRA responded 
appropriately to the concerns raised. Indeed, the Commission believes 
that the proposal promotes the goals of transparency, consistency in 
trade reporting and dissemination, and timely reporting by FINRA 
members.
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    \35\ In approving this proposed rule change, the Commission has 
considered the proposed rule's impact on efficiency, competition, 
and capital formation. See 15 U.S.C. 78c(f).
    \36\ 15 U.S.C. 78o-3(b)(6).
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    Furthermore, the Commission believes that the proposal is 
consistent with Section 11A(a)(1)(C)(iii) of the Act,\37\ which sets 
forth Congress' finding that it is in the public interest and 
appropriate for the protection of investors and the maintenance of fair 
and orderly markets to assure the availability to brokers, dealers, and 
investors of information with respect to quotations and transactions in 
securities. The Commission believes that these goals are furthered by 
the proposed changes requiring that members report OTC transactions in 
NMS stocks and OTC Equity Securities, and cancellations of such 
transactions, to FINRA as soon as practicable, but no later than 10 
seconds, following execution (or cancellation, as applicable). The 
proposed rule change is reasonably designed to accomplish these goals 
by shortening the time within which FINRA members must report trades. 
As FINRA stated in its proposal, timely reporting has become even more 
critical with the implementation of the Single Stock Circuit Breaker 
trading pause rules and the Limit Up/Limit Down Plan. These initiatives 
are triggered by specified movements in stock prices, thus it is even 
more important that trades be reported in the sequence in which they 
occur so that a single stock circuit breaker is not triggered off of a 
trade report that is out of sequence. The regulatory landscape is 
become increasingly more automated and the the vast majority of trades 
are now reported in a much shorter period of time than currently 
required.\38\ As noted by one commenter, firms and exchanges measure 
performance in microseconds.\39\
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    \37\ 15 U.S.C. 78k-1(a)(1)(C)(iii).
    \38\ For example, FINRA noted that during the period of July 9 
through July 13, 2012, 99.96% of last-sale eligible trades were 
reported within 10 seconds of execution (with a breakdown of 99.97% 
of OTC trades in NMS stocks and 99.04% of OTC trades in OTC Equity 
Securities). During the same period, 288 member firms reported one 
or more OTC trades to FINRA. Of these firms, only 12 were unable to 
report any of their trades within 10 seconds. Of the 25,251,098 last 
sale eligible trades reported during this period, the total number 
of trades reported by these 12 firms was 21 (0.0000831% of the total 
number of trades). In addition, there were only 22 member firms that 
were unable to report at least 50% of their last sale eligible 
trades within 10 seconds (this number includes the 12 firms 
mentioned above). The total number of trades reported by these 22 
firms was 899 (0.0035602% of the total number of trades). The 
majority of the firms that FINRA spoke to indicated that their 
business model is not to execute and report trades, but instead to 
route most of their orders to other firms for execution, while a few 
other firms indicated that, as a more general matter, they do not 
trade equities very frequently. FINRA also stated that it believes 
that the burden of the proposed rule change should be minimal, 
particularly since FINRA looks to a pattern and practice of late 
trade reporting and typically does not charge a member for isolated 
instances of late reporting. See Notice, supra note 4.
    \39\ See KOR Letter.

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[[Page 29193]]

    However, four commenters asserted that the proposal places an undue 
burden on firms with processes that are manual in nature.\40\ In 
response to this comment, in Amendment No. 1, FINRA stated that it will 
take such factors as the complexity and manual nature of the execution 
and reporting of the trade into consideration in determining whether 
``reasonable justification'' exists for what otherwise might be deemed 
to be a pattern or practice of late trade reporting.\41\ The Commission 
supports FINRA's expectation that members must periodically assess 
their reporting processes, manual or otherwise, to ensure that they 
implement the most efficient policies and procedures for trade 
reporting possible.\42\
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    \40\ See note 17, supra, and accompanying text.
    \41\ The Commission notes that FINRA is not proposing a separate 
standard for designating manual trades as timely versus late for 
purposes of dissemination. All trades that are reported more than 10 
seconds after execution, regardless of whether they are reported 
automatically or manually, would be identified as late for reporting 
and dissemination purposes and would not be considered ``last sale'' 
eligible under the CTA and UTP Plans. See FINRA Response and 
Amendment No. 1.
    \42\ See FINRA Response.
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    Commenters also raised concerns on whether the benefits of the 
proposed rule change outweigh the costs associated with compliance.\43\ 
In its filing with the Commission, FINRA stated its belief that the 
proposed rule change will enhance market transparency and price 
discovery, promote more consistent trade reporting by members and 
facilitate implementation and further the goals of the Single Stock 
Circuit Breaker trading pause rules and the Limit Up/Limit Down Plan. 
Although the Commission acknowledges the potential for firms covered by 
these new reporting requirements to incur additional compliance burdens 
and costs, the Commission believes that any such burdens are outweighed 
by the overall benefits of increased transparency and access to more 
comprehensive and accurately sequenced trade information in the OTC 
markets.
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    \43\ See note 23 supra, and accompanying text.
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    Two commenters raised potential queuing issues and question whether 
firms will be able to comply with the proposed 10-second reporting 
requirement during regularly occurring periods of high volume such as 
market open and close, during highly subscribed IPOs or when a firm is 
reporting basket trades with a large number of securities.\44\ The 
Commission agrees with FINRA's response that under current rules, 
unusual market conditions, such as extreme volatility in a security or 
in the market as a whole, may be considered in determining whether 
reasonable justification or exceptional circumstances exists to explain 
late trade reporting.\45\
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    \44\ See note 28, supra and accompanying text.
    \45\ See FINRA Response.
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    One commenter questioned whether firms will be able to comply with 
the proposed 10-second reporting requirement when reporting trades to 
the ORF following migration to FINRA's new MPP and asserted that 
introducing new trade reporting requirements before the migration is 
premature.\46\ FINRA responded that it did not believe that the planned 
migration of the ORF to the new MPP infrastructure would affect the 
ability of a firm's automated trade reporting systems to ensure 
compliance with the proposed rule change and further elaborated on this 
justification.\47\ The Commission believes that FINRA adequately 
responded to this concern and additionally notes that the proposed 
implementation period of 120 to 180 days following Commission approval 
will provide sufficient time for firms to make and test any systems 
changes that may be required to comply with the proposed rule change.
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    \46\ See note 33, supra and accompanying text.
    \47\ The Commission notes that FINRA has revised its migration 
schedule; this change will be implemented before the migration to 
the new platform.
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    Moreover, the Commission shares FINRA's belief that the proposed 
rule change will enhance market transparency and price discovery, 
promote more consistent and accurately sequenced trade reporting by 
members and facilitate implementation and further the goals of the 
Single Stock Circuit Breaker trading pause rules and the Limit Up/Limit 
Down Plan. As FINRA stated in submitting its proposal, timely reporting 
has become even more critical with the implementation of Regulation NMS 
and these other regulatory initiatives. Additionally, the proposed rule 
change will lessen the ability of members to withhold important market 
information from investors and other market participants for 
competitive or other improper reasons. Going forward, the Commission 
expects FINRA to monitor the effect of this change and to consider the 
need to lower the time within which trades must be reported even 
further.

V. Conclusion

    It is therefore ordered, pursuant to Section 19(b)(2) of the Act, 
that the proposed rule change (SR-FINRA-2013-013), as modified by 
Amendment No. 1, be, and hereby is, approved.

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\48\
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    \48\ 17 CFR 200.30-3(a)(12).
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Lynn M. Powalski,
Deputy Secretary.
[FR Doc. 2013-11714 Filed 5-16-13; 8:45 am]
BILLING CODE 8011-01-P