FINRA Proposes Rules to Reduce Synchronization Tolerances in Clocks That Record NMS Events

FINRA proposed new Rule 4590 (and a corresponding amendment to existing Rule 7430) in order to reduce the synchronization tolerance for FINRA members' computer clocks that record events in National Market System ("NMS") securities, including standardized options and OTC Equity Securities.

The proposal would reduce the drift tolerance from one second to 50 milliseconds for computer clocks that record events in such securities. However, the proposal would change neither the current one-second standard for securities other than OTC Equity or NMS Securities nor the current one-second standard for events recorded by mechanical clocks or time-stamping devices.