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For purposes of the Rule 7400 Series:
(a) Terms shall have the same meaning as those defined in the FINRA By-Laws and rules, unless otherwise specified.
(b) "Bunched Order" shall mean two or more orders that are aggregated prior to execution.
(c) "Customer" shall mean a person other than a broker or dealer.
(d) "Electronic Communication Network" shall mean any electronic system that widely disseminates to third parties orders entered therein by an exchange market maker or over-the-counter market maker, and permits such orders to be executed in whole or in part, and as further defined in Rule 600(b)(23) of SEC Regulation NMS.
(e) "Electronic Order" shall mean an order captured by a member in an electronic order-routing or execution system.
(f) "Index Arbitrage Trade" shall have the same meaning as the term "Index Arbitrage" in New York Stock Exchange Rule 7410.
(g) "Intermarket sweep order" shall have the same meaning as contained in Rule 600(b)(30) of SEC Regulation NMS.
(h) "Manual Order" shall mean an order that is captured by a member other than in an electronic order-routing or execution system.
(i) "NMS stock" shall have the same meaning as contained in Rule 600(b)(47) of SEC Regulation NMS.
(j) "Order" shall mean any oral, written, or electronic instruction to effect a transaction in an NMS stock or an OTC equity security that is received by a member from another person for handling or execution, or that is originated by a department of a member for execution by the same or another member, other than any such instruction to effect a proprietary transaction originated by a trading desk in the ordinary course of a member's market making activities.
(k) "Order Audit Trail System" shall mean the automated system owned and operated by FINRA that is designed to capture order information in NMS stocks and OTC equity securities reported by members for integration with trade and quotation information to provide FINRA with an accurate time sequenced record of orders and transactions.
(l) "OTC equity security" shall have the same meaning as defined in Rule 6420, except that for purposes of the Rule 7400 Series, the term OTC equity security shall not include direct participation programs, as defined in Rule 6420.
(m) "Program Trade" shall have the same meaning as the term "Program Trading" in New York Stock Exchange Rule 7410.
(n) "Reporting Agent" shall mean a third party that enters into any agreement with a member pursuant to which the Reporting Agent agrees to fulfill such member's obligations under Rule 7450.
(o) "Reporting Member" shall mean a member that receives or originates an order and has an obligation to record and report information under Rules 7440 and 7450.
(1) A member shall not be considered a Reporting Member in connection with an order, if the following conditions are met:
(A) the member engages in a non-discretionary order routing process, pursuant to which it immediately routes, by electronic or other means, all of its orders to:
(i) a single receiving Reporting Member; or
(ii) two receiving Reporting Members, provided:
a. orders are routed by the member to each receiving Reporting Member on a pre-determined schedule approved by FINRA; and
b. orders are routed to two receiving Reporting Members pursuant to the schedule for a time period not to exceed one year; and
(B) the member does not direct and does not maintain control over subsequent routing or execution by the receiving Reporting Member(s);
(C) the receiving Reporting Member(s) record(s) and report(s) all information required under Rules 7440 and 7450 with respect to the order; and
(2) A member shall not be considered a Reporting Member in connection with an order if:
(B) the member operates consistent with NASD IM-1013-1 or NASD IM-1013-2, including limiting its business operations to "permitted floor activities," as that term is defined in NASD IM-1013-1 and NASD IM-1013-2; and
(C) the order was received by the member through systems operated and regulated by the New York Stock Exchange or NYSE Amex.
(p) "SRO-assigned identifier" shall mean a unique identifier assigned to a broker or dealer by a national securities exchange or national securities association for use by such broker or dealer when accessing the exchange or a facility of the association.
Amended by SR-FINRA-2016-006 eff. Aug. 1, 2016.
Amended by SR-FINRA-2014-045 eff. Dec. 1, 2014.
Amended by SR-FINRA-2014-024 eff. May 12, 2014.
Amended by SR-FINRA-2011-066 eff. Nov. 4, 2011.
Amended by SR-FINRA-2011-055 eff. Oct. 17, 2011.
Amended by SR-FINRA-2011-050 eff. Oct. 17, 2011.
Amended by SR-FINRA-2011-021 eff. Oct. 17, 2011.
Amended by SR-FINRA-2010-044 eff. Oct. 17, 2011.
Amended by SR-FINRA-2010-051 eff. Nov. 1, 2010.
Amended by SR-FINRA-2009-061 eff. Nov. 1, 2010.
Amended by SR-FINRA-2010-003 eff. June 28, 2010.
Amended by SR-FINRA-2009-005 eff. Feb. 17, 2009.
Amended by SR-FINRA-2008-057 eff. Dec. 15, 2008.
Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
Amended by SR-NASD-2007-028 eff. Feb. 4, 2008.
Amended by SR-NASD-2005-101 eff. Feb. 4, 2008.
Amended by SR-NASD-2006-091 eff. March 5, 2007.
Amended by SR-NASD-2007-019 eff. March 1, 2007.
Amended by SR-NASD-2006-087 eff. Aug. 1, 2006
Amended by SR-NASD-2005-087 eff. Aug. 1, 2006.
Amended by SR-NASD-2004-076 eff. May 5, 2004.
Adopted by SR-NASD-97-56 eff. according to schedule in Rule 6957.
Selected Notices: 98-33, 06-70, 08-57, 10-24, 10-26, 11-03, 16-20.
- Regulatory Notice 16-20May 27, 2016
- Regulatory Notice 10-26May 28, 2010