Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Partial Amendment No. 1 to Proposed Rule Change To Amend FINRA Rule 6730 To Reduce the 15-Minute TRACE Reporting Timeframe to One Minute, 61514-61516 [2024-16801]
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61514
Federal Register / Vol. 89, No. 147 / Wednesday, July 31, 2024 / Notices
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competitive standing in the financial
markets.
The Exchange does not believe that
the proposed rule changes will impose
any burden on intermarket competition
that is not necessary or appropriate in
furtherance of the purposes of the Act.
As previously discussed, the Exchange
operates in a highly competitive market.
Members have numerous alternative
venues that they may participate on and
direct their order flow, including 16
other options exchanges and offexchange venues. Additionally, the
Exchange represents a small percentage
of the overall market. Based on publicly
available information, no single options
exchange has more than 13% of the
market share.17 Therefore, no exchange
possesses significant pricing power in
the execution of option order flow.
Indeed, participants can readily choose
to send their orders to other exchange
and off-exchange venues if they deem
fee levels at those other venues to be
more favorable. Moreover, the
Commission has repeatedly expressed
its preference for competition over
regulatory intervention in determining
prices, products, and services in the
securities markets. Specifically, in
Regulation NMS, the Commission
highlighted the importance of market
forces in determining prices and SRO
revenues and, also, recognized that
current regulation of the market system
‘‘has been remarkably successful in
promoting market competition in its
broader forms that are most important to
investors and listed companies.’’ 18 The
fact that this market is competitive has
also long been recognized by the courts.
In NetCoalition v. Securities and
Exchange Commission, the D.C. Circuit
stated as follows: ‘‘[n]o one disputes
that competition for order flow is
‘fierce.’ . . . As the SEC explained, ‘[i]n
the U.S. national market system, buyers
and sellers of securities, and the brokerdealers that act as their order-routing
agents, have a wide range of choices of
where to route orders for execution’;
[and] ‘no exchange can afford to take its
market share percentages for granted’
because ‘no exchange possesses a
monopoly, regulatory or otherwise, in
the execution of order flow from broker
dealers’ . . . .’’.19 Accordingly, the
Exchange does not believe its proposed
fee change imposes any burden on
competition that is not necessary or
17 See
supra note 4.
Securities Exchange Act Release No. 51808
(June 9, 2005), 70 FR 37496, 37499 (June 29, 2005).
19 NetCoalition v. SEC, 615 F.3d 525, 539 (D.C.
Cir. 2010) (quoting Securities Exchange Act Release
No. 59039 (December 2, 2008), 73 FR 74770, 74782–
83 (December 9, 2008) (SR–NYSEArca–2006–21)).
18 See
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appropriate in furtherance of the
purposes of the Act.
C. Self-Regulatory Organization’s
Statement on Comments on the
Proposed Rule Change Received From
Members, Participants, or Others
The Exchange neither solicited nor
received comments on the proposed
rule change.
III. Date of Effectiveness of the
Proposed Rule Change and Timing for
Commission Action
The foregoing rule change has become
effective pursuant to Section 19(b)(3)(A)
of the Act 20 and paragraph (f) of Rule
19b–4 21 thereunder. 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. If the
Commission takes such action, the
Commission will institute proceedings
to determine whether the proposed rule
change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to
submit written data, views and
arguments concerning the foregoing,
including whether the proposed rule
change is consistent with the Act.
Comments may be submitted by any of
the following methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
CboeBZX–2024–068 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–CboeBZX–2024–068. This
file number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
PO 00000
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 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. Copies of the filing also
will be available for inspection and
copying at the principal office of the
Exchange. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection. All
submissions should refer to file number
SR–CboeBZX–2024–068 and should be
submitted on or before August 21, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.22
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–16794 Filed 7–30–24; 8:45 am]
BILLING CODE 8011–01–P
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100594; File No. SR–
FINRA–2024–004]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Partial
Amendment No. 1 to Proposed Rule
Change To Amend FINRA Rule 6730 To
Reduce the 15-Minute TRACE
Reporting Timeframe to One Minute
July 25, 2024.
I. Introduction
On January 11, 2024, the Financial
Industry Regulatory Authority, Inc.
(‘‘FINRA’’) filed with the Securities and
Exchange Commission (‘‘SEC’’ or
‘‘Commission’’), pursuant to Section
19(b)(1) of the Securities Exchange Act
of 1934 (‘‘Act’’ or ‘‘Exchange Act’’) 1 and
Rule 19b–4 thereunder,2 a proposed rule
change (SR–FINRA–2024–004) to
amend FINRA Rule 6730 to reduce the
15-minute reporting timeframe for
transactions reported to FINRA’s Trade
22 17
CFR 200.30–3(a)(12).
U.S.C. 78s(b)(1).
2 17 CFR 240.19b–4.
20 15
U.S.C. 78s(b)(3)(A).
21 17 CFR 240.19b–4(f).
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Federal Register / Vol. 89, No. 147 / Wednesday, July 31, 2024 / Notices
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Reporting and Compliance Engine
(‘‘TRACE’’) system to one minute, with
exceptions for FINRA member firms
with de minimis reporting activity and
for manual trades. The proposed rule
change was published for comment in
the Federal Register on January 25,
2024.3
On February 29, 2024, pursuant to
Section 19(b)(2) of the Act,4 the
Commission designated a longer period
within which to approve the proposed
rule change, disapprove the proposed
rule change, or institute proceedings to
determine whether to disapprove the
proposed rule change.5 On April 22,
2024, the Commission instituted
proceedings under Section 19(b)(2)(B) of
the Act 6 to determine whether to
approve or disapprove the proposed
rule change.7 On July 18, 2024, the
Commission, pursuant to Section
19(b)(2) of the Act,8 designated
September 20, 2024, as the date by
which the Commission shall either
approve or disapprove the proposed
rule change.9 On July 18, 2024, FINRA
responded to comments 10 and filed a
partial amendment to the proposed rule
change in response to certain comments
on the proposed rule change (‘‘Partial
Amendment No. 1’’). Partial
Amendment No. 1 is described in Item
II below, which has been substantially
prepared by FINRA.11 The Commission
is publishing this notice to solicit
comments on Partial Amendment No. 1
from interested persons.12
3 See Securities Exchange Act Release No. 99404
(Jan. 19, 2024), 89 FR 5034 (Jan. 25, 2024)
(‘‘Notice’’). Comments received on the proposed
rule change are available at: https://www.sec.gov/
comments/sr-finra-2024-004/srfinra2024004.htm.
4 15 U.S.C. 78s(b)(2).
5 See Securities Exchange Act Release No. 99640
(Feb. 29, 2024), 89 FR 16042 (Mar. 6, 2024). The
Commission designated April 24, 2024, as the date
by which the Commission shall approve or
disapprove, or institute proceedings to determine
whether to disapprove, the proposed rule change.
6 15 U.S.C. 78s(b)(2)(B).
7 See Securities Exchange Act Release No. 100006
(Apr. 22, 2024), 89 FR 32475 (Apr. 26, 2024).
8 15 U.S.C. 78s(b)(2).
9 See Securities Exchange Act Release No. 100555
(July 18, 2024), 89 FR 59948 (July 24, 2024)
(‘‘Extension’’).
10 See Letter from Racquel L. Russell, Senior Vice
President, Director of Capital Markets Policy, Office
of General Counsel, FINRA, dated July 18, 2024,
available at https://www.sec.gov/comments/sr-finra2024-004/srfinra2024004.htm.
11 The Commission has reformatted FINRA’s
presentation of its proposed modifications to, and
descriptions of, the proposed rule change.
12 Partial Amendment No. 1 is also available on
FINRA’s website at https://www.finra.org/sites/
default/files/2024-07/SR-FINRA-2024-004-PartialA-1.pdf.
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II. Self-Regulatory Organization’s
Statement of the Terms of Substance of
the Proposed Partial Amendment
FINRA is proposing the following
amendments to the filing:
1. FINRA Proposes To Amend the
Proposed Manual Trades Exception To
Provide FINRA Members With an
Additional Year To Transition to FiveMinute Reporting for Manual Trades
As discussed in the original filing, the
proposed rule change would create an
exception from the proposed oneminute reporting requirement for
manual trades.13 As originally
proposed, manual trades would have
been subject to reporting as soon as
practicable with a five-minute outerlimit reporting timeframe, phased in
after two years.14 Specifically, where a
trade qualified for the manual trades
exception, a 15-minute outer limit
would have applied for the first year
following implementation; a 10-minute
outer limit would have applied for the
second year; and a five-minute outer
limit would have applied thereafter.15
Some commenters raised various
concerns regarding the feasibility of
five-minute reporting for manual trades,
and some commenters recommended
that FINRA study and assess (and
provide an opportunity for public
comment on) the feasibility of fiveminute reporting for manual trades prior
to its implementation or maintain a 15minute reporting requirement for
manual trades.16
In response to these comments,
FINRA is amending the proposed rule
change to extend the phase-in period for
five-minute reporting by one year so
that FINRA members would have three
years to transition to five-minute
reporting for manual trades.17
Accordingly, the proposed rule
change, as amended, would provide that
a FINRA member relying on the manual
trades exception will be required to
report the manual trade as soon as
practicable and no later than within 15
minutes of the time of execution (for up
to one calendar year from the
effectiveness of the proposed
amendments), within 10 minutes of the
time of execution (for up to three
calendar years from the effectiveness of
the proposed amendments), and within
five minutes of the time of execution
(three or more calendar years from the
effectiveness of the proposed
PO 00000
13 See
Notice, supra note 3.
14 Id.
amendments).18 Partial Amendment No.
1 will provide FINRA with additional
time to assess FINRA members’ trade
reporting times in connection with
manual trades and request comment on
the operation of the manual trades
exception—and FINRA will be prepared
to make adjustments, as necessary, prior
to the effectiveness of the five-minute
reporting timeframe.19
Following are the changes proposed
in Partial Amendment No. 1, with the
proposed changes in the original filing
shown as if adopted. Proposed new
language in Partial Amendment No. 1 is
italicized; proposed deletions in Partial
Amendment No. 1 are in brackets:
6730. Transaction Reporting
(a) through (f) No Change.
• • • Supplementary Material:
—————
.01 through .08 No Change.
.09 Exception for Manual Trades
(a) No Change.
(b) Except as otherwise specifically
provided in paragraph (a)(2) of this Rule
with respect to List or Fixed Offering
Price Transactions and Takedown
Transactions, a member relying on the
exception for manual trades in this
Supplementary Material .09 must report
the transaction as soon as practicable
but no later than within: 15 minutes of
the Time of Execution (this 15-minute
outer timeframe is available for up to
one calendar year from the effectiveness
of this Supplementary Material .09);
within 10 minutes of the Time of
Execution (this 10-minute outer
timeframe is available for up to
three[two] calendar years from the
effectiveness of this Supplementary
Material .09); or within 5 minutes of the
Time of Execution (this 5-minute outer
timeframe is applicable three[two] or
more calendars years from the
effectiveness of this Supplementary
Material .09), as further provided in this
paragraph.
(1) No Change.
(2) Transactions Executed During
TRACE System Hours
Transactions executed on a business
day at or after 8:00:00 a.m. Eastern Time
through 6:29:59 p.m. Eastern Time
(standard TRACE System Hours) must
be reported as soon as practicable, but
no later than within 15, 10, or 5 minutes
of the Time of Execution[after the
TRACE system opens] (the 15-, 10-, or
5-minute outer timeframe is available
for up to one year, up to three[two]
15 Id.
16 See
Partial Amendment No. 1 at 4.
17 Id.
Frm 00119
18 See
19 See
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proposed Rule 6730.09(b).
Partial Amendment No. 1 at 5.
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Federal Register / Vol. 89, No. 147 / Wednesday, July 31, 2024 / Notices
years, or three[two] or more years,
respectively, from the effectiveness of
this Supplementary Material .09),
except as provided in paragraph (b)(3) of
this Supplementary Material .09.
(3) Transactions Executed Less Than 5
Minutes Before TRACE System Closes
Transactions executed on a business
day less than 15, 10, or 5 minutes (the
15-, 10-, or 5-minute timeframe is
available for up to one year, up to
three[two] years, or three[two] or more
years, respectively, from the
effectiveness of this Supplementary
Material .09) before 6:30:00 p.m. Eastern
Time must be reported as soon as
practicable after the TRACE system
opens the next business day (T + 1), but
no later than within 15 minutes after the
TRACE system opens the next business
day, and if reported on T + 1, designated
‘‘as/of’’ and include the date of
execution.
(4) No Change.
2. FINRA Proposes To Make a
Correction to the Text of Proposed Rule
6730.09(b)(2)
Additionally, Partial Amendment No.
1 would make a correction to the
proposed rule text such that proposed
Rule 6730.09(b)(2) would require
reporting within the prescribed
timeframe from ‘‘the Time of Execution’’
rather than ‘‘after the TRACE system
opens.’’ 20 As originally proposed, for
transactions subject to the manual
trades exception that were executed on
a business day at or after 8:00:00 a.m.
Eastern Time (‘‘ET’’) through 6:29:59
p.m. ET (i.e., during TRACE system
hours), the rule text erroneously would
have required reporting ‘‘. . . as soon as
practicable, but no later than within 15,
10, or 5 minutes after the TRACE system
opens. . . .’’ 21 Partial Amendment No.
1 would correct the text of proposed
Rule 6730.09(b)(2) so that it requires
reporting of these transactions ‘‘. . . as
soon as practicable, but no later than
within 15, 10, or 5 minutes of the Time
of Execution. . . .’’ 22
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III. Solicitation of Comments
Interested persons are invited to
submit written data, views, and
arguments concerning the foregoing,
including whether the proposed rule
change, as amended by Partial
Amendment No. 1, is consistent with
the Act. Comments may be submitted by
any of the following methods:
20 See
Partial Amendment No. 1 at 5.
proposed Rule 6730.09(b)(2).
22 See Partial Amendment No. 1 at 5.
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/sro.shtml); or
• Send an email to rule-comments@
sec.gov. Please include file number SR–
FINRA–2024–004 on the subject line.
Paper Comments
• Send paper comments in triplicate
to Secretary, Securities and Exchange
Commission, 100 F Street NE,
Washington, DC 20549–1090.
All submissions should refer to file
number SR–FINRA–2024–004. This file
number should be included on the
subject line if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method. The Commission will
post all comments on the Commission’s
internet website (https://www.sec.gov/
rules/sro.shtml). Copies of the
submission, all subsequent
amendments, all written statements
with respect to the proposed rule
change that are filed with the
Commission, and all written
communications relating to the
proposed rule change between the
Commission and any person, other than
those that may be withheld from the
public in accordance with the
provisions of 5 U.S.C. 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. Copies of the filing also
will be available for inspection and
copying at the principal office of
FINRA. Do not include personal
identifiable information in submissions;
you should submit only information
that you wish to make available
publicly. We may redact in part or
withhold entirely from publication
submitted material that is obscene or
subject to copyright protection.
All submissions should refer to File
Number SR–FINRA–2024–004 and
should be submitted on or before
August 21, 2024.
For the Commission, by the Division of
Trading and Markets, pursuant to delegated
authority.23
Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024–16801 Filed 7–30–24; 8:45 am]
BILLING CODE 8011–01–P
21 See
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17:29 Jul 30, 2024
Jkt 262001
23 17
PO 00000
CFR 200.30–3(a)(12).
Frm 00120
Fmt 4703
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SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–100589; File No. SR–
MSRB–2024–01]
Self-Regulatory Organizations;
Municipal Securities Rulemaking
Board; Notice of Filing of Amendment
No. 1 to Proposed Rule Change
Consisting of Amendments to MSRB
Rule G–14 To Shorten the Timeframe
for Reporting Trades in Municipal
Securities to the MSRB
July 25, 2024.
I. Introduction
On January 12, 2024, the Municipal
Securities Rulemaking Board (‘‘MSRB’’)
filed with the Securities and Exchange
Commission (‘‘SEC’’ or ‘‘Commission’’),
pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (‘‘Act’’
or ‘‘Exchange Act’’) 1 and Rule 19b–4
thereunder,2 a proposed rule change to
(1) amend MSRB Rule G–14 (‘‘Rule G–
14’’), on reports of sales or purchases, to
(i) shorten the amount of time within
which brokers, dealers, and municipal
securities dealers (collectively,
‘‘dealers,’’ and each individually, a
‘‘dealer’’) must report most transactions
to the MSRB; and (ii) require dealers to
report certain transactions with a new
trade indicator, and make certain
clarifying amendments, and (2) make
conforming amendments to MSRB Rule
G–12, on uniform practice (‘‘Rule G–
12’’), and the MSRB’s Real-Time
Transaction Reporting System (‘‘RTRS’’)
Information Facility (‘‘IF–1’’) to reflect
the shortened reporting timeframe
(collectively, the ‘‘proposed rule
change’’).3 The proposed rule change
was published for comment in the
Federal Register on January 26, 2024.4
The Commission received comments
in response to the proposed rule
change.5 On April 22, 2024, the
Commission instituted proceedings
under Section 19(b)(2)(B) of the Act 6 to
determine whether to approve or
disapprove the proposed rule change.
On July 18, 2024, the Commission,
pursuant to Section 19(b)(2) of the Act,7
designated September 20, 2024, as the
date by which the Commission shall
either approve or disapprove the
1 15
U.S.C. 78s(b)(1).
CFR 240.19b–4.
3 See Exchange Act Release No. 99402 (Jan. 19,
2024), 89 FR 5384 (Jan. 26, 2024) (‘‘Notice’’).
4 Id. at 5384.
5 Comment letters received by the Commission
are available on our website at https://www.sec.gov/
comments/sr-msrb-2024-01/srmsrb202401.htm.
6 15 U.S.C. 78s(b)(2)(B).
7 15 U.S.C. 78s(b)(2).
2 17
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]]>Agencies
[Federal Register Volume 89, Number 147 (Wednesday, July 31, 2024)]
[Notices]
[Pages 61514-61516]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-16801]
-----------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-100594; File No. SR-FINRA-2024-004]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Partial Amendment No. 1 to Proposed Rule
Change To Amend FINRA Rule 6730 To Reduce the 15-Minute TRACE Reporting
Timeframe to One Minute
July 25, 2024.
I. Introduction
On January 11, 2024, the Financial Industry Regulatory Authority,
Inc. (``FINRA'') filed with the Securities and Exchange Commission
(``SEC'' or ``Commission''), pursuant to Section 19(b)(1) of the
Securities Exchange Act of 1934 (``Act'' or ``Exchange Act'') \1\ and
Rule 19b-4 thereunder,\2\ a proposed rule change (SR-FINRA-2024-004) to
amend FINRA Rule 6730 to reduce the 15-minute reporting timeframe for
transactions reported to FINRA's Trade
[[Page 61515]]
Reporting and Compliance Engine (``TRACE'') system to one minute, with
exceptions for FINRA member firms with de minimis reporting activity
and for manual trades. The proposed rule change was published for
comment in the Federal Register on January 25, 2024.\3\
---------------------------------------------------------------------------
\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
\3\ See Securities Exchange Act Release No. 99404 (Jan. 19,
2024), 89 FR 5034 (Jan. 25, 2024) (``Notice''). Comments received on
the proposed rule change are available at: https://www.sec.gov/comments/sr-finra-2024-004/srfinra2024004.htm.
---------------------------------------------------------------------------
On February 29, 2024, pursuant to Section 19(b)(2) of the Act,\4\
the Commission designated a longer period within which to approve the
proposed rule change, disapprove the proposed rule change, or institute
proceedings to determine whether to disapprove the proposed rule
change.\5\ On April 22, 2024, the Commission instituted proceedings
under Section 19(b)(2)(B) of the Act \6\ to determine whether to
approve or disapprove the proposed rule change.\7\ On July 18, 2024,
the Commission, pursuant to Section 19(b)(2) of the Act,\8\ designated
September 20, 2024, as the date by which the Commission shall either
approve or disapprove the proposed rule change.\9\ On July 18, 2024,
FINRA responded to comments \10\ and filed a partial amendment to the
proposed rule change in response to certain comments on the proposed
rule change (``Partial Amendment No. 1''). Partial Amendment No. 1 is
described in Item II below, which has been substantially prepared by
FINRA.\11\ The Commission is publishing this notice to solicit comments
on Partial Amendment No. 1 from interested persons.\12\
---------------------------------------------------------------------------
\4\ 15 U.S.C. 78s(b)(2).
\5\ See Securities Exchange Act Release No. 99640 (Feb. 29,
2024), 89 FR 16042 (Mar. 6, 2024). The Commission designated April
24, 2024, as the date by which the Commission shall approve or
disapprove, or institute proceedings to determine whether to
disapprove, the proposed rule change.
\6\ 15 U.S.C. 78s(b)(2)(B).
\7\ See Securities Exchange Act Release No. 100006 (Apr. 22,
2024), 89 FR 32475 (Apr. 26, 2024).
\8\ 15 U.S.C. 78s(b)(2).
\9\ See Securities Exchange Act Release No. 100555 (July 18,
2024), 89 FR 59948 (July 24, 2024) (``Extension'').
\10\ See Letter from Racquel L. Russell, Senior Vice President,
Director of Capital Markets Policy, Office of General Counsel,
FINRA, dated July 18, 2024, available at https://www.sec.gov/comments/sr-finra-2024-004/srfinra2024004.htm.
\11\ The Commission has reformatted FINRA's presentation of its
proposed modifications to, and descriptions of, the proposed rule
change.
\12\ Partial Amendment No. 1 is also available on FINRA's
website at https://www.finra.org/sites/default/files/2024-07/SR-FINRA-2024-004-Partial-A-1.pdf.
---------------------------------------------------------------------------
II. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Partial Amendment
FINRA is proposing the following amendments to the filing:
1. FINRA Proposes To Amend the Proposed Manual Trades Exception To
Provide FINRA Members With an Additional Year To Transition to Five-
Minute Reporting for Manual Trades
As discussed in the original filing, the proposed rule change would
create an exception from the proposed one-minute reporting requirement
for manual trades.\13\ As originally proposed, manual trades would have
been subject to reporting as soon as practicable with a five-minute
outer-limit reporting timeframe, phased in after two years.\14\
Specifically, where a trade qualified for the manual trades exception,
a 15-minute outer limit would have applied for the first year following
implementation; a 10-minute outer limit would have applied for the
second year; and a five-minute outer limit would have applied
thereafter.\15\ Some commenters raised various concerns regarding the
feasibility of five-minute reporting for manual trades, and some
commenters recommended that FINRA study and assess (and provide an
opportunity for public comment on) the feasibility of five-minute
reporting for manual trades prior to its implementation or maintain a
15-minute reporting requirement for manual trades.\16\
---------------------------------------------------------------------------
\13\ See Notice, supra note 3.
\14\ Id.
\15\ Id.
\16\ See Partial Amendment No. 1 at 4.
---------------------------------------------------------------------------
In response to these comments, FINRA is amending the proposed rule
change to extend the phase-in period for five-minute reporting by one
year so that FINRA members would have three years to transition to
five-minute reporting for manual trades.\17\
---------------------------------------------------------------------------
\17\ Id.
---------------------------------------------------------------------------
Accordingly, the proposed rule change, as amended, would provide
that a FINRA member relying on the manual trades exception will be
required to report the manual trade as soon as practicable and no later
than within 15 minutes of the time of execution (for up to one calendar
year from the effectiveness of the proposed amendments), within 10
minutes of the time of execution (for up to three calendar years from
the effectiveness of the proposed amendments), and within five minutes
of the time of execution (three or more calendar years from the
effectiveness of the proposed amendments).\18\ Partial Amendment No. 1
will provide FINRA with additional time to assess FINRA members' trade
reporting times in connection with manual trades and request comment on
the operation of the manual trades exception--and FINRA will be
prepared to make adjustments, as necessary, prior to the effectiveness
of the five-minute reporting timeframe.\19\
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\18\ See proposed Rule 6730.09(b).
\19\ See Partial Amendment No. 1 at 5.
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Following are the changes proposed in Partial Amendment No. 1, with
the proposed changes in the original filing shown as if adopted.
Proposed new language in Partial Amendment No. 1 is italicized;
proposed deletions in Partial Amendment No. 1 are in brackets:
6730. Transaction Reporting
(a) through (f) No Change.
Supplementary Material:----------
.01 through .08 No Change.
.09 Exception for Manual Trades
(a) No Change.
(b) Except as otherwise specifically provided in paragraph (a)(2)
of this Rule with respect to List or Fixed Offering Price Transactions
and Takedown Transactions, a member relying on the exception for manual
trades in this Supplementary Material .09 must report the transaction
as soon as practicable but no later than within: 15 minutes of the Time
of Execution (this 15-minute outer timeframe is available for up to one
calendar year from the effectiveness of this Supplementary Material
.09); within 10 minutes of the Time of Execution (this 10-minute outer
timeframe is available for up to three[two] calendar years from the
effectiveness of this Supplementary Material .09); or within 5 minutes
of the Time of Execution (this 5-minute outer timeframe is applicable
three[two] or more calendars years from the effectiveness of this
Supplementary Material .09), as further provided in this paragraph.
(1) No Change.
(2) Transactions Executed During TRACE System Hours
Transactions executed on a business day at or after 8:00:00 a.m.
Eastern Time through 6:29:59 p.m. Eastern Time (standard TRACE System
Hours) must be reported as soon as practicable, but no later than
within 15, 10, or 5 minutes of the Time of Execution[after the TRACE
system opens] (the 15-, 10-, or 5-minute outer timeframe is available
for up to one year, up to three[two]
[[Page 61516]]
years, or three[two] or more years, respectively, from the
effectiveness of this Supplementary Material .09), except as provided
in paragraph (b)(3) of this Supplementary Material .09.
(3) Transactions Executed Less Than 5 Minutes Before TRACE System
Closes
Transactions executed on a business day less than 15, 10, or 5
minutes (the 15-, 10-, or 5-minute timeframe is available for up to one
year, up to three[two] years, or three[two] or more years,
respectively, from the effectiveness of this Supplementary Material
.09) before 6:30:00 p.m. Eastern Time must be reported as soon as
practicable after the TRACE system opens the next business day (T + 1),
but no later than within 15 minutes after the TRACE system opens the
next business day, and if reported on T + 1, designated ``as/of'' and
include the date of execution.
(4) No Change.
2. FINRA Proposes To Make a Correction to the Text of Proposed Rule
6730.09(b)(2)
Additionally, Partial Amendment No. 1 would make a correction to
the proposed rule text such that proposed Rule 6730.09(b)(2) would
require reporting within the prescribed timeframe from ``the Time of
Execution'' rather than ``after the TRACE system opens.'' \20\ As
originally proposed, for transactions subject to the manual trades
exception that were executed on a business day at or after 8:00:00 a.m.
Eastern Time (``ET'') through 6:29:59 p.m. ET (i.e., during TRACE
system hours), the rule text erroneously would have required reporting
``. . . as soon as practicable, but no later than within 15, 10, or 5
minutes after the TRACE system opens. . . .'' \21\ Partial Amendment
No. 1 would correct the text of proposed Rule 6730.09(b)(2) so that it
requires reporting of these transactions ``. . . as soon as
practicable, but no later than within 15, 10, or 5 minutes of the Time
of Execution. . . .'' \22\
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\20\ See Partial Amendment No. 1 at 5.
\21\ See proposed Rule 6730.09(b)(2).
\22\ See Partial Amendment No. 1 at 5.
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III. Solicitation of Comments
Interested persons are invited to submit written data, views, and
arguments concerning the foregoing, including whether the proposed rule
change, as amended by Partial Amendment No. 1, is consistent with the
Act. Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/sro.shtml); or
Send an email to [email protected]. Please include
file number SR-FINRA-2024-004 on the subject line.
Paper Comments
Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-FINRA-2024-004. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all
written statements with respect to the proposed rule change that are
filed with the Commission, and all written communications relating to
the proposed rule change between the Commission and any person, other
than those that may be withheld from the public in accordance with the
provisions of 5 U.S.C. 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. Copies of the filing also will be available for
inspection and copying at the principal office of FINRA. Do not include
personal identifiable information in submissions; you should submit
only information that you wish to make available publicly. We may
redact in part or withhold entirely from publication submitted material
that is obscene or subject to copyright protection.
All submissions should refer to File Number SR-FINRA-2024-004 and
should be submitted on or before August 21, 2024.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\23\
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\23\ 17 CFR 200.30-3(a)(12).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2024-16801 Filed 7-30-24; 8:45 am]
BILLING CODE 8011-01-P
