Trade Reporting Obligation for Certain Alternative Trading Systems – FINRA Rules 6183, 6625 and 6731


January 7, 2014

 

Mr. Venu Palaparthi
Chief Compliance Officer
NPM Securities LLC
221 Pine Street
San Francisco, CA 94111

 

Re: Application for Exemptive Relief from Trade Reporting Obligations

 

Dear Mr. Palaparthi:

 

The Market Regulation Department of FINRA (the "staff") has received and reviewed your letter dated January 7, 2014, in which NPM Securities LLC ("NPMS") requests exemptive relief from the FINRA trade reporting obligations pursuant to FINRA Rules 6625 and 6731.

 

Based on the information provided in your application, and conditioned upon NPMS providing the items listed below, the staff has determined that NPMS meets the specified criteria and hereby grants, pursuant to FINRA Rule 9610, NPMS an exemption from the trade reporting obligation under FINRA Rules 6622(b) and 6730.

 

  1. Within 90 days of the effective registration of NPMS as a FINRA member, NPMS must provide to FINRA a written attestation that it has entered into written agreements as required by FINRA Rules 6625(a)(3) and 6731(a)(3) with all of its FINRA member subscribers. In addition, within 90 days of the effective registration of NPMS as a FINRA member, NPMS must provide to FINRA a sample of at least two such agreements.1
  2. Within 60 days of the effective registration of NPMS as a FINRA member, NPMS shall provide to FINRA data relating to the volume of trades required to be reported, by security, executed by NPMS subscribers using NPMS (e.g., number of trades, number of shares traded and the total settlement value for each security traded) for the most recent calendar month. On a going forward basis, NPMS must provide such monthly trade volume information to FINRA and such information must be received by FINRA no later than the 10th business day following the completion of each calendar month.

 

This exemption will be fully and finally effective upon the date that FINRA receives the written attestation described in Item 1 above. If NPMS fails to provide such written attestation within this time frame, the exemption granted herein will be revoked unless otherwise expressly agreed to by FINRA.

 

This letter responds only to the issue you have raised based on the facts as you have described them, and does not address any other rule or interpretation of FINRA, or all the possible regulatory and legal issues involved. Any changes in the facts or representations as you have described them will require further consideration and may cause us to reach a different conclusion. You should contact FINRA immediately if there is a change in any of the facts or representations contained in your letter. In addition, this exemption is subject to modification or revocation if at any time FINRA determines that such action is necessary or appropriate for the protection of investors.

 

Should you have any questions about this letter, please contact David Chapman in Market Regulation at (240) 386-4995.

 

Sincerely,

 

Jon Kroeper
Senior Vice President
Market Regulation Department

 


 

1 NPMS is reminded that the firm must retain the written agreements pursuant to its books and records obligations under FINRA rules, the Exchange Act, and applicable Exchange Act rules, and must be able to produce them to FINRA upon request.