Regulatory Notice 12-50

SEC Approves Amendments Relating to Stop Orders

Effective Date: March 4, 2013
Update 1/9/13: The effective date for compliance with Rule 5350 has been extended to March 4, 2013. Original Effective Date: January 21, 2013

The SEC approved new FINRA Rule 5350 (Stop Orders), which replaces the stop order provisions of FINRA Rule 6140(h).  The rule provides that any order labeled as a “stop order” or a “stop limit order” must be triggered based upon a transaction at the stop price, but permits firms to offer alternative order types with different triggers (e.g., a stop order triggered by a quotation at the stop price) so long as the order type is not labeled as a stop order and is clearly distinguishable from a stop order.

The text of the rule can be found in the online FINRA Manual.

Questions regarding this Notice should be directed to:

  • Racquel L. Russell, Assistant General Counsel, Office of General Counsel, at (202) 728-8363; or
  • Scott B. Trilling, Director, Market Regulation, at (240) 386-5113.

Update 1/9/13: The effective date for compliance with Rule 5350 has been extended to March 4, 2013. Original Effective Date: January 21, 2013