Exemptive Relief from the OATS Recording and Reporting Requirements Pursuant to FINRA Rules 7470 and 9610

FINRA Rule 7470 contains a provision that permits FINRA to grant exemptive relief from the OATS reporting and recording requirements for manual orders in certain circumstances, for example, where reporting of such information would be unduly burdensome for the member or where temporary relief from the rules would permit the member to avoid unnecessary expense or hardship (in the form of additional time to achieve compliance).

 

Firms that meet all of the following criteria are eligible to request an exemption:

 

1. The member and current control affiliates and associated persons of the member have not been subject within the last five years to any final disciplinary action, and within the last 10 years to any disciplinary action involving fraud;
2. The member has annual revenues of less than $2 million;
3. The member does not conduct any market making activities in NASDAQ Stock Market equity or OTC equity securities;
4. The member does not execute principal transactions with its customers (with limited exception for principal transactions executed pursuant to error corrections); and
5. The member does not conduct any clearing or carrying activities for other firms.

 

Any exemptive relief granted would be for a period of no longer than two years. At or prior to the expiration of a grant of exemptive relief, members continuing to meet the criteria specified above may request a subsequent exemption.

 

To formally request exemptive relief, please complete and submit the following request form (PDF 26 KB) via fax, email or regular mail, along with supporting documentation, to the following address:

 

FINRA, Market Regulation Department/OATS

9509 Key West Avenue

Rockville, MD 20850

Fax: 240-386-5139

Email: OATS Phase III

 

With a copy to:

 

FINRA, Regulation and Policy Oversight Office of General Counsel

1735 K Street, NW

Washington DC 20006

Attention:  Matthew Adeola