FIF Asks for Clarification on New Order Routing Disclosure Requirements

The Financial Information Forum ("FIF") asked FINRA for clarification on new requirements for order routing disclosure reports for OTC and National Market System equity securities orders.

In a Comment Letter, FIF asked FINRA to confirm, pursuant to newly adopted FINRA Rule 6151 ("Disclosure of Order Routing Information for NMS Securities") and Rule 6470 ("Disclosure of Order Routing Information for OTC Equity Securities") (see previous coverage here and here), that:

• broker-dealers would not be required to publish a report for the quarter, if the broker-dealer’s customer orders in OTC equity securities for the quarter were directed or not held; and
• broker-dealers exempt from the reporting requirement for a calendar quarter will not be required to disclose that it is exempt on its website.

FIF also asked FINRA to provide a one-year implementation period only after (i) issuing a Regulatory Notice on the effective date of the final rules, (ii) making technical specifications, including a file format for the symbol lists and (iii) publishing written guidance on the reporting for trading activity on the OTC Link ATS. FIF recommended updated guidelines regarding the reporting of trading activity on the OTC Link ATS based on the fact that FINRA will require the reporting of a participating market maker as the execution venue (see previous coverage).

Separately, FIF requested from the SEC confirmation that a broker-dealer satisfies its publication requirements if it provides a link from its website to the FINRA webpage for Rule 606(a) reports.