Regulatory Notice 18-11

FINRA Cautions Members Regarding Recommending and Entering Unpriced Customer Orders at and Around the Opening on the First Day of Trading of a Direct Listing

Summary

FINRA advises firms to exercise caution in recommending and entering unpriced customer orders at and around the opening on the first day of trading of a direct listing of a security. FINRA is concerned that, without the use of a limit price, customers may receive executions at prices that are not in line with their expectations and ultimate investment decision. FINRA encourages firms to consider the appropriateness of using and recommending (and discussing with customers the benefits of using) priced, limit orders at and around the opening on the first day of trading of a direct listing.

Questions regarding this Notice should be directed to:

  • Patrick Geraghty, Vice President, Market Regulation, at (240) 386-4973; or
  • Racquel Russell, Associate General Counsel, Office of General Counsel, at (202) 728-8363.