Amendments to FINRA Trade Reporting Requirements for Transactions in a Distribution (Notice)

RN 11-40

August 29, 2011

The SEC granted approval to amendments to the FINRA rules that clarify, for purposes of the exception for trade reporting for transactions that are part of a distribution, the term "distribution" has the same meaning as under Regulation M. In addition, the rule change clarifies that transfers of equities for the purpose of redeeming instruments such as ADRs or ETFs are excluded from trade reporting requirements. Firms that rely on the transaction exception for securities part of an "unregistered secondary distribution" are required to give notice to FINRA providing certain details on the offering.

Firms should review their trade reporting procedures as there has been considerable uncertainty as to how the term "distribution" should be interpreted in the trade reporting rules.

Cross References:

FINRA Rules 6282, 6380A, 6380B, 6622

Regulation M, Rule 100

76 FR 48937 (Approval; SEC Release No. 34-65025)

76 FR 37382 (Proposal; SEC Release No. 34-64706)