Regulation T Filings

The Federal Reserve Board's Regulation T and SEC Rule 15c3-3 provide for the possibility of extensions of credit by broker-dealers to investors when they have not promptly paid for a securities transaction.

Specifically, Regulation T gives an investor a maximum of four business days to pay for securities purchased in a cash or margin account. If payment due exceeds $1,000 and is not received by the end of this time period, the broker-dealer must either liquidate the position or apply for and receive an extension from its designated examining authority, such as FINRA.

SEC Rule 15c3-3 pertains to a customer's obligations when securities are sold, other than short sales. The rule requires that if a security sold long has not been delivered within 10 business days after the settlement date, the broker-dealer must either buy the customer in, or apply for and receive an extension from its designated examining authority.

Firms must file Regulation T and SEC Rule 15c3-3 extension of time requests via FINRA's Regulatory Extension (REX) system (formerly known as the Reg T application). See Regulatory Notice 10-28 for more information.

How to Use the REX System

Reminder for Clearing Firms: Clearing firms have obligations under the Net Capital Rule relative to Regulation T and outstanding deposits and/or margin, as described in SEC Rule 15c3-1 (c) (2) (iv) (B). In addition, if a customer fails to meet his/her responsibilities to deliver a security and that failure results in a clearing firm fail-to-deliver, the Net Capital Rule requires charges under certain conditions. These changes are outlined in SEC Rule 15c3-1 (c) (2) (ix).

Regulation Extension (REX) Form

Sign in to the FINRA Gateway to access the REX form.

Training

REX System Tutorial

Guidance

Regulatory Notice 10-28 New System for Processing Regulation T and SEA Rule 15c3-3 Extension of Time Requests; Effective Dates: August 31, 2010 (Phase I); November 8, 2010 (Phase II) REX Reason Codes Extensions of time limits by reasons and time periods.

Frequently Asked Questions

Data Fields

1. Will clearing firms have access to FINRA's Central Registration Depository (CRD) database in order to retrieve the CRD numbers of their correspondent firms?
   No. A clearing firm will only be able to access its own CRD numbers through the CRD database. If a clearing firm is filing an extension of time request on behalf of a correspondent firm, the clearing firm must obtain the applicable CRD number from the correspondent firm.
    
2. In the quantity field, how should fractional shares be handled?
   Fractional shares cannot be entered into the quantity field. Firms must input a whole number.
    
3. When multiple trades are executed for the same customer account on the same trade date, what information is required for the amount, quantity and issue symbol/CUSIP fields?
   The amount field should be populated with the net debit created on that trade date. If this total amount is $1,000 or less, no extension request is required. If a secondary extension request is made, the total dollar amount must not exceed the value on the original request. The quantity and issue symbol/CUSIP fields need only be populated with the details from one of the transactions, regardless of whether different securities or issuers are involved.
    
4. For SEC Rule 15c3-3(d)2 or (d)3 extension requests, should the deficiency date field be one or two business days prior to the extension request date?
   The deficiency date should be one business day prior to the extension request date.
    
5. How are extended settlement dates for foreign transactions handled?
   Use reason code "008" when submitting extensions that are filed under Regulation T for foreign transactions with a settlement cycle greater than five business days after the trade date. SEC Rule 15c3-3 extensions must be filed 10 business days from the settlement date, regardless of the settlement cycle of the security.
    
6. An account has a firm-assigned registered representative number (i.e., an internal number and not a CRD number) that is shared by more than one person. Since each registered representative will have his or her own CRD number, which CRD number should be used?
   The firm needs to choose one registered representative's CRD number. The firm should use its best judgment in associating an individual registered representative with each particular account.

Reports

1. When and how will a firm be able to receive reports for submitted extension requests?
   Firms will be able to view all of their extension requests online shortly after submission regardless of how they submit such extensions. Firms that use a batch process using File Transfer Protocol (FTP) or Secure File Transfer Protocol (SFTP) will receive their reports via FTP or SFTP. Firms using a service provider will not receive reports directly from FINRA through FTP or SFTP; they will need to access their reports through their service provider.

Processing Extensions

1. Will FINRA be issuing new user IDs for access to the REX system?
   New user access is not required for the REX system: All user IDs and passwords will automatically transfer from the Reg T system to the new REX system
    
2. What is the cut-off time for extension requests to be submitted?
   Extension requests can be submitted up until 12 a.m. (midnight) Eastern Time for any given request date.
    
3. If a firm submits extension requests via a batch process using FTP, can it also submit extension requests directly via the online application?
   Yes. Firms will be able to submit extensions online regardless of how it normally submits extensions.
    
4. How will my firm be billed for extensions that are submitted?
   Firms will be billed on a quarterly basis for all extensions whether such requests are granted or denied. Pursuant to Section 8 of Schedule A to the FINRA By-Laws, the service charge for processing extension requests is currently $4 per request.

Historical Information

• Regulatory Notice 08-53 FINRA Revises the Effective Date to Collect and Process Certain CRD Numbers in Connection with Regulation T and SEC Rule 15c3-3 Extensions of Time Requests; Effective Date: April 1, 2009
• Regulatory Notice 08-32 FINRA Consolidates the Collection and Processing of Regulation T and SEC Rule 15c3-3 Extension of Time Requests; Effective Date: November 17, 2008
• Notice to Members 00-45 NASD Announces Changes To SEC Rule 15c3-3 Extension Request Reason Codes; Effective Date: July 10, 2000

Contact Information

• Theresa Reynolds at (646) 315-8567.