Technical Notice

FINRA/Nasdaq Trade Reporting Facility Retail Participants

December 7, 2018

As previously announced in Nasdaq Equity Trader Alert # ETA2018-63, effective September 1, 2018, a new category of participant on the FINRA/Nasdaq Trade Reporting Facility (or “FINRA/Nasdaq TRF”)1 was established for purposes of trade reporting fees under FINRA Rule 7620A – the Retail Participant. The Retail Participant Program is designed to better align and tailor retail pricing to the profile and behavior of Retail Participants. Among other aspects of the Retail Participant Program, Retail Participants are exempt from the monthly Participation Fee of $350, which also became effective on September 1, 2018. See FINRA Rule 7620A; Nasdaq Equity Trader Alert # 2018-63.

Pursuant to FINRA Rule 7620A.03, to become a Retail Participant, a firm must submit to Nasdaq, Inc., as the operator of the FINRA/Nasdaq TRF, an application and written attestation that it qualifies as a Retail Participant. Thereafter, the firm must submit a written attestation annually to retain its status as a Retail Participant. The application and attestation form is available on the FINRA/Nasdaq TRF Forms and Agreements page.

Some firms that met the definition of “Retail Participant” under FINRA Rule 7620A as of September 1, 2018, may not have had sufficient time to complete and submit the required documentation to demonstrate eligibility as a Retail Participant before becoming liable for the Participation Fee. Because the Participation Fee does not apply to Retail Participants, firms will be entitled to a credit of any Participation Fees they may have been charged between September 2018 and the date of approval as a Retail Participant, provided that the firm is able to demonstrate that it qualified as a Retail Participant as of September 1, 2018. Qualifying firms that have submitted their application and attestation by December 31, 2018 will receive a credit on their invoice, even if they are not formally approved by Nasdaq, Inc. as a Retail Participant until after December 31, 2018.

Firms that do not submit the required application and attestation prior to December 31, 2018 will not be entitled to a credit of the Participation Fees charged prior to their approval by Nasdaq, Inc. as a Retail Participant.

Finally, subject to a proposed rule change to be filed with the SEC, the existing Retail Participant Program will be modified. The proposed changes are intended to reduce the fees that many Retail Participants pay the FINRA/Nasdaq TRF and make the transaction credit program more accessible to Retail Participants. Additional information regarding these changes will be provided at a later date.

Questions regarding this notice should be directed to:

  • Nasdaq TRF Product Management by email, Nasdaq Subscriber Services by email or at (212) 231-5180
  • FINRA Market Operations at (866) 776-0800 or by email.

1. As used herein and under FINRA rules, “FINRA/Nasdaq TRF” means the FINRA/Nasdaq TRF Carteret or the FINRA/Nasdaq TRF Chicago, depending on the facility to which the member firm reports.