SEC Approves Proposed Rule Filing SR-FINRA-2011-063

On December 21, 2011 the SEC approved FINRA proposed rule filing SR-FINRA-2011-063. This rule filing addresses changes to the OATS Rules related to the Information Barrier and Customer Instruction Flag fields in OATS and codifies the specific time OATS Reports must be transmitted to FINRA.  The implementation date for these rule changes is April 16, 2012. 

This rule change now requires firms relying on the exception provided in FINRA Rule 5320.02 to provide in its OATS Reports the unique identification of any appropriate information barriers in place at the department within the member where the order was received or originated. This rule change does not change any OATS validations. Rather, where the Information Barrier ID was previously optional, beginning April 16, 2012, firms will be required to report information barrier information when firms rely on the “no-knowledge” exception to Rule 5320. Because this field is already available for use, firms may begin populating the field before the implementation date if they so choose.

This rule change also requires that firms now populate the Customer Instruction Flag on all limit orders. Currently, firms are only required to populate the Customer Instruction Flag when the order involves a security subject to SEC Regulation NMS. With the approval of FINRA Rule 6460, which became effective on May 9, 2011, the limit order display rules were extended to include orders in OTC equity securities. As a result, beginning April 16, 2012, OATS Reporting Members will be required to populate the Customer Instruction Flag for all limit orders, not just those involving NMS stocks.

Finally, the rule change codifies the 8 a.m., Eastern Time, OATS reporting deadline as previously published in the OATS Reporting Technical Specifications

Please contact the OATS Helpdesk at 1-800-321-6273 with any questions.