In order for the regulators to determine if broker-dealers are fulfilling their obligations as to the execution of customer orders, the regulators require that a broker-dealer keep a complete record of the history of each order, recording the time of receipt and of each step that the broker-dealer has taken until execution or cancellation of the trade. In addition, the time of each event must be affixed ("time stamped") to the event, whether manually or electronically.
For these time records to be accurate, broker-dealers are required to synchronize their clocks with a very high degree of accuracy; FINRA Rule 6860 provides for time stamp data being reported in milliseconds, although manual order events may be reported to the second.
The currently effective time synchronization requirement for FINRA is in Rule 4590; however, the FINRA Consolidated Audit Trail requirements, as adopted by FINRA and all of the securities exchanges, will also have a time synchronization requirement that will apply not only to FINRA members but also to exchange members that are not FINRA members. See the topic page on the Consolidated Audit Trail.
The SEA and SRO recordkeeping requirements applicable to broker-dealers also require them to keep, create and maintain records of the times of which orders were received and executed.