Regulatory Notice 14-04

SEC Approves Amendments to FINRA Rules 6271 and 6272 Regarding the Requirements For Firms Seeking Registration as FINRA Alternative Display Facility (ADF) Market Participants

Effective Date: February 3, 2014

The Securities and Exchange Commission (SEC) has approved amendments to FINRA rules governing registration in and participation on the ADF. The amendments add new requirements to the application that prospective ADF market participants must submit to FINRA prior to submitting quotes on and reporting trades to the ADF. As part of the application process, the amendments require prospective ADF market participants to submit a deposit (ADF Deposit Amount) into escrow. The amendments also set forth the framework pursuant to which an ADF market participant may earn back some or all of its ADF Deposit Amount, enumerate additional documents that a firm seeking registration as an ADF market participant must execute, and clarify the process by which a firm’s registration as an ADF market participant becomes effective.

The text of the new rule is available in the online FINRA Manual.

Questions concerning this Notice or FINRA Rules 6271 and 6272 should be directed to:

  • Chris Stone, Vice President, Transparency Services, at (202) 728-8457;
  • Brendan Loonam, Director – Business Services, Transparency Services, at (212) 858-4203;
  • Brant Brown, Associate General Counsel, Office of General Counsel (OGC), at (202) 728-6927; or
  • Andrew Madar, Associate General Counsel, OGC, at (202) 728-8071.