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Uniform Practice Code (UPC)

The Uniform Practice Code (UPC) is a series of rules, interpretations and explanations designed to make uniform, where practicable, custom, practice, usage, and trading technique in the investment banking and securities business, particularly with regards to operational and settlement issues. These can include such matters as trade terms, deliveries, payments, dividends, rights, interest, reclamations, exchange of confirmations, stamp taxes, claims, assignments, powers of substitution, computation of interest and basis prices, due-bills, transfer fees, "when, as and if issued" trading, "when, as and if distributed" trading, marking to the market, and close-out procedures. The UPC was created so that the transaction of day-to-day business by members may be simplified and facilitated, that business disputes and misunderstandings, which arise from uncertainty and lack of uniformity in such matters, may be eliminated, and that the mechanisms of a free and open market may be improved and impediments thereto removed.

All over-the-counter transactions in securities by members, except transactions in securities which are exempted under Section 3(a)(12) of the Securities Exchange Act of 1934, or municipal securities as defined in Section 3(a)(29) of the Act, are subject to the provisions of the Uniform Practice Code and to the provisions of Article XIV Section 2 of FINRA's By-laws unless exempted therefrom by the terms of the Uniform Practice Code.


Forms & Documentation

Issuers, ADR depositary banks and other parties that provide notice of company-related actions to FINRA under Rule 6490 must use a new electronic system to provide such notice to FINRA. FINRA no longer accepts paper copies of the Issuer and ADR Company-Related Action Notification Forms. FINRA continues to accept paper copies of the Transfer Agent Verification Form, as it is not a part of the new electronic system. See Regulatory Notice 11-09 for more information.


UPC Advisories

Uniform Practice Code Advisories are notices that pertain to unusual circumstances such as extremely large dividends, when-issued settlement dates, ex-interest dates for bonds, worthless securities, cancelled IPOs, etc. Their intent is to announce rulings, interpretations, exemptions and advisories on these subjects; to facilitate the transaction of a member's day-to-day business; and to eliminate business disputes and misunderstandings that may arise from uncertainty and lack of uniformity in such matters, The subjects addressed in the Uniform Practice Code Advisories are subject to the provisions of the FINRA Uniform Practice Code (Rule 11000 Series), which is administered by FINRA Operations.


FAQ

Find answers to Frequently Asked Questions covering topics such as: fees schedules, dividends and terminology.


UPC Committee

The Uniform Practice Code is administered by the Uniform Practice Code Committee. The Committee may issue interpretations or rulings with respect to the Uniform Practice Code; advise the FINRA Regulation Board with respect to the clearance and settlement of securities transactions and other financial responsibility and operational matters that may require modifications to the UPC or other FINRA rules; and exercise the functions contained in Rule 11890 in accordance with the procedures specified therein.

The FINRA Board shall appoint the Uniform Practice Code Committee by resolution. The Uniform Practice Code Committee shall have not more than 50 percent of its members directly engaged in market-making activity or employed by a member firm whose revenues from market-making activity exceed ten percent of its total revenues.

  • SEC Approves Amendments to FINRA Rules to Conform to the Shortened Standard Settlement Cycle for Most Broker-Dealer Transactions From Three Business Days (T+3) to Two Business Days After the Trade Date (T+2)
  • FINRA Requests Comment on Proposed Amendments to FINRA Rules to Support the Industry Initiative to Shorten the Settlement Cycle for Securities in the U.S. Secondary Market From T+3 to T+2
  • New Electronic System for Submitting and Processing Company-Related Actions for Non-Exchange Listed Securities Under Rule 6490