SR-FINRA-2023-003

The Financial Industry Regulatory Authority, FINRA, has published on its website a proposal to revise several of its rules primarily for „clean-up“ purposes, that is for the removal of duplicate requirements in various regulations or redundant regulations. FINRA thereby proposes to modify or repeal
(1) FINRA Rule 4590 relating to clock synchronization requirements of FINRA member firms for the recording of securities transactions. Such synchronization obligation is also stipulated in FINRA Rule 6820 (Clock Synchronization) which is why FINRA would clarify in Rule 4590 that it only applies where Rule 6820 doesn’t apply (modification of FINRA Rule 4590).
(2) FINRA Rule 6250 relating to access and reporting requirements of FINRA member firms that utilize FINRA’s „Alternative display facility“ (market makers). The reporting requirements are also stipulated in FINRA rule 6830 which requires the reporting of specified order information with respect to orders „originated, received, transmitted, modified, canceled or executed by other broker-dealers“ (modification of FINRA Rule 6250).
(3) FINRA Rule 6431 as regards the making available of information by market makers in connection with OTC instruments quoted or displayed on „a non-FINRA- or non-member-operated inter-dealer quotation system (IDQS)“. As this Rule is no longer needed due to FINRA’s ability to monitor such quotes otherwise, FINRA proposes to delete this rule altogether.
(4) FINRA Rule 6439 relating to specific information that must be provided to FINRA for real-time security quotations by inter-dealer quotation systems. Point (d) thereby requires the monthly reporting of „aggregate and order-level information for orders in OTC equity securities“. This reporting obligation is also stipulated in FINRA Rule 6830 which makes the provision in Rule 6439 redundant. The rule shall therefore be deleted.
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As the rule changes are minor in nature and do not affect current requirements of FINRA member firms, FINRA has filed the proposal with the Securities and Exchange Commission (SEC) for approval with immediate effect.