Regulatory Notice 17-09

The National Securities Exchanges and FINRA Issue Joint Guidance on Clock Synchronization and Certification Requirements Under the CAT NMS Plan

Effective Date: March 15, 2017

Executive Summary

On November 15, 2016, the Securities and Exchange Commission (SEC) approved the National Market System Plan Governing the Consolidated Audit Trail (Plan). The Plan, as modified by an exemptive order issued by the SEC, includes synchronization and certification requirements with regard to business clocks that capture time in milliseconds.

The participants in the Plan, including the national securities exchanges and FINRA, are issuing the attached alert to provide firms with information regarding upcoming deadlines regarding clock synchronization requirements, including certifications, that apply to certain firms. In general, if a firm’s clocks that are used to record time related to “Reportable Events” in NMS Securities and OTC equity securities currently capture time in milliseconds, the firm must comply with the clock synchronization, documentation and certification requirements set forth in the SROs’ compliance rule series, and summarized in Attachment A, by or before March 15, 2017. Under the Plan, the term “Reportable Events” includes, without limitation, the original receipt or origination, modification, cancellation, routing, execution (in whole or in part) and allocation of an order, and receipt of a routed order.

Questions concerning this Notice should be directed to:

  • Alex Ellenberg, Associate General Counsel, Office of General Counsel, at (202) 728-8152; or
  • Paul McKenney, Senior Director, Market Regulation, at (240) 386-5068