SEC Approves FINRA Rule Change Related to a Capacity Management Plan

The SEC granted approval of a FINRA rule amendment regarding its Capacity Management Plan (the "Plan"). The SEC noted that the rule change was published for comment in the Federal Register on January 8, 2014, but received no comments.

To ensure that the Alternative Display Facility ("ADF") has sufficient capacity to handle the volume of quotes, order and trade data submitted to the ADF, without maintaining unused data capacity, FINRA proposed to adopt the Plan for those FINRA members that opt to utilize the ADF for quoting and trade reporting.

Pursuant to the Plan, each ADF Trading Center would complete an initial ADF Trading Center Capacity Certification process, including testing its connectivity to the ADF as well as submitting volume projections for current and future peak data reporting levels on a quarterly basis and on demand from FINRA. Specifically, the Plan would provide a timeframe by which ADF Trading Centers submit initial and final volume projections for the next two calendar quarters, with final volume projections tested and certified by FINRA in the event of a capacity upgrade. The Plan also would provide ADF Trading Centers with the ability to increase and decrease their capacity projections for the second quarter, subject to certain limitations, in the event that their actual capacity usage deviated from their projected capacity usage. FINRA stated that it would honor an ADF Trading Center's capacity requests and build out to support the ADF Trading Center's peak projected capacity requirements. Each ADF Trading Center would still participate in quarterly volume tests before being certified to a specific volume level.

See: SEC Order Granting Approval.Related news: SEC Approves FINRA-Proposed Rule Change to Update Rules Governing ADF (February 4, 2014) FINRA Proposed Rule Change Regarding ADF Capacity Management Plan (January 3, 2014); FINRA Files Proposed Rule Change to Update Rules Governing ADF (December 20, 2013).