Reg T/15c3-3 Extension Requests

 

The Federal Reserve Board's Regulation T and SEC Rule 15c3-3 provide for the possibility of extensions where investors have not promptly met their obligations relative to a securities transaction.

 

Regulation T pertains to an investor's obligation when a security is purchased. Specifically, an investor is given a maximum of five business days to pay for securities purchased in a cash or margin account. If payment due exceeds $1,000 and is not received by the end of this time period, the broker/dealer must either liquidate the position or apply for and receive an extension from its designated examining authority.

 

SEC Rule 15c3-3 pertains to a customer's obligations when securities are sold, other than short sales. SEC Rule 15c3-3 requires that if a security sold long has not been delivered within 10 business days after the settlement date, the broker/dealer must either buy the customer in or apply for and receive an extension from its designated examining authority.

 

Clearing firms are reminded of their obligations under the Net Capital Rule relative to Regulation T and outstanding deposits and/or margin as described in SEC Rule 15c3-1 (c) (2) (iv) (B). In addition, should a customer fail to meet his/her responsibilities to deliver a security and that failure results in a clearing firm fail-to-deliver, the Net Capital Rule requires charges under certain conditions. These changes are outlined in SEC Rule 15c3-1 ( c) (2) (ix).

 

• You may go directly to the Regulation Filing Applications by clicking https://RegFiling.finra.org.
• Questions concerning Regulation T/15c3-3 Extension Request System can be directed to Vincent Rotolo at (646) 315-8576, Debra German at (646) 315-8467, or Theresa Reynolds at (646) 315-8567.

 

Please view this other important information about Reg T/15c3-3 Extension Requests.

 

• Regulatory Notice 08-53 FINRA Revises the Effective Date to Collect and Process Certain CRD Numbers in Connection with Regulation T and SEC Rule 15c3-3 Extensions of Time Requests; Effective Date: April 1, 2009
  
  
• Regulatory Notice 08-32 FINRA Consolidates the Collection and Processing of Regulation T and SEC Rule 15c3-3 Extension of Time Requests; Effective Date: November 17, 2008
  
  
• Notice to Members 00-45 NASD Announces Changes To SEC Rule 15c3-3 Extension Request Reason Codes; Effective Date: July 10, 2000
  
  
• Announcements
  • Important Reg T Extension Request System Announcement, 11/19/08: Many firms that file extensions via batch processing have been experiencing a large number of 'REJECTED' extensions with the following error message; "Original Extension Request not found. Secondary request rejected". more >
    

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Frequently Asked Questions

 

Data Fields

 

1. Will clearing firms have access to FINRA’s Central Registration Depository (CRD) database in order to retrieve the CRD numbers of their correspondent firms?
   
   No. A clearing firm will only be able to access its own CRD numbers through the Central Registration Depository database. If a clearing firm is filing an extension of time request on behalf of a correspondent firm, the clearing firm must obtain the applicable CRD number from the correspondent firm.
   
   
2. In the quantity field, how should fractional shares be handled?
   
   Fractional shares cannot be entered into the quantity field. Firms must input a whole number.
   
   
3. When multiple trades are executed for the same customer account on the same trade date, what information is required for the amount, quantity and issue symbol/CUSIP fields?
   
   The amount field should be populated with the net debit created on that trade date. If this total amount is $1000 or less, no extension request is required. If a secondary extension request is made, the total dollar amount must not exceed the value on the original request. The quantity and issue symbol/CUSIP fields need only be populated with the details from one of the transactions, regardless of whether different securities or issuers are involved.
   
   
4. For SEC Rule 15c3-3(d)2 or (d)3 extension requests, should the deficiency date field be one or two business days prior to the extension request date?
   
   The deficiency date should be one-business day prior to the extension request date.
   
   
5. How are extended settlement dates for foreign transactions handled?
   
   Use reason code “008” when submitting extensions that are filed under Regulation T for foreign transactions with a settlement cycle greater than five-business days after the trade date. SEC Rule 15c3-3 extensions must be filed 10 business days from the settlement date, regardless of the settlement cycle of the security.
   
   
6. FINRA requires a CRD number for a registered representative. What should a firm do for self-directed accounts where there is no registered representative assigned to the account?
   
   Firms uploading a file via the File Upload page or transmitting a file via a batch processing feed through FTP must enter “999999999999” (12 characters) for self-directed accounts. Firms that file online may check a radio button that indicates the extension is being filed on behalf of a self-directed account.
   
   
7. An account has a firm-assigned registered representative number (i.e., an internal number and not a CRD number) that is shared by more than one person. Since each registered representative will have his or her own CRD number, which CRD number should be used?
   
   The firm needs to choose one registered representative’s CRD number. The firm should use its best judgment in associating an individual registered representative with each particular account.

 

Reports

 

1. When and how will a firm be able to receive reports for submitted extension requests?
   
   Firms will be able to view all of their extension requests online shortly after submission regardless of how they submit such extensions. Firms submitting extensions via the File Upload page can access a report directly from the same online location. Firms that use a batch process using File Transfer Protocol (FTP) will receive their reports via FTP. Firms using a service provider will not receive reports directly from FINRA through FTP; they will need to access their reports through their service provider.
   
   
2. How long will firms have online viewing access to submitted extension requests?
   
   Firms will have access to their submitted extension requests for 10 calendar days.

 

Processing Extensions

 

1. How does a firm get access to the Reg T application?
   
   Firms will need a FINRA user ID and password to access the Reg T System. To request a FINRA user ID and password, contact the FINRA Help Desk at (800) 321-6273. Once a user has an ID and a password, the user can log in to the following site:
   
   https://firms.finra.org/regt
   
   
2. What is the cut-off time for extension requests to be submitted?
   
   Extension requests can be submitted up until 12:00 am (midnight) Eastern Time for any given request date.
   
   
3. If a firm submits an incorrect extension through FINRA’s Reg T System whether online, through uploading a file via the File Upload page or transmitting a file via a batch processing feed through FTP, can the firm amend it after it is submitted?
   
   No. The firm must contact Credit Regulation at FINRA via email to request a correction. Firms can contact any of the following individuals:
   
   • Debra German,
   • Theresa Reynolds, or
   • Vincent Rotolo.
     
     
4. If a firm submits extension requests via a batch process using FTP, can it also submit extension requests directly via the online application?
   
   Yes. Firms will be able to submit extensions online regardless of how it normally submits extensions.
   
   
5. How will my firm be billed for extensions that are submitted?
   
   Firms will be billed on a quarterly basis for all extensions whether such requests are granted or denied. Pursuant to Section 8 of Schedule A to the FINRA By-Laws, the service charge for processing extension requests is currently $4 per request.

 

Testing / Training

 

1. Will FINRA perform parallel processing along with the current production process?
   
   No, there will be no parallel processing. FINRA intends to provide a test environment to firms to test their programming changes beginning October 20, 2008. Firms can access the test environment at https://regfilingtest.finra.org. For firms that will transmit files via FTP, FINRA will accept test data files transmitted through its testing environment during the same time period. Additional testing for the programming for the fields that will become mandatory on April 1, 2009, will be available beginning late February or early March 2009.
   
   
2. Will FINRA provide any training tools to firms on how to use the Reg T system?
   
   As noted in Regulatory Notice 08-32, training for the online application will be available via an online tutorial beginning on November 1, 2008. Firms can access the tutorial at http://www.finra.org/Industry/Tools/index.htm.