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7470. Exemption to the Order Recording and Data Transmission Requirements
The SEC has approved a proposed rule change (SR-FINRA-2020-024) to remove the Rule 7400 Series from the FINRA rulebook; however, by its terms, SR-FINRA-2020-024 will not be implemented until FINRA has determined that the Consolidated Audit Trail has achieved a level of accuracy and reliability sufficient to replace the Order Audit Trail System. Once FINRA has determined that such standards have been met, FINRA will file for immediate effectiveness a rule filing setting forth the basis for its determination and will publish a Regulatory Notice announcing the implementation date of SR-FINRA-2020-024.
(a) Pursuant to the Rule 9600 Series, the staff, for good cause shown after taking into consideration all relevant factors, may exempt, subject to specified terms and conditions, a member from the recording and order data transmission requirements of Rules 7440 and 7450, respectively, for manual orders, if such exemption is consistent with the protection of investors and the public interest, and the member meets the following criteria:
(1) the member and current control affiliates and associated persons of the member have not been subject within the last five years to any final disciplinary action, and within the last ten years to any disciplinary action involving fraud;
(2) the member has annual revenues of less than $2 million;
(3) the member does not conduct any market making activities in NMS stocks or OTC equity securities;
(4) the member does not execute principal transactions with its customers (with limited exception for principal transactions executed pursuant to error corrections); and
(5) the member does not conduct clearing or carrying activities for other firms.
(b) An exemption provided pursuant to this Rule shall not exceed a period of two years. At or prior to the expiration of a grant of exemptive relief under this Rule, a member meeting the criteria set forth in paragraph (a) above may request, pursuant to the Rule 9600 Series, a subsequent exemption, which will be considered at the time of the request, consistent with the protection of investors and the public interest.
(c) This Rule shall be in effect until July 11, 2022.
|Amended by SR-FINRA-2019-021 eff. July 12, 2019.
Amended by SR-FINRA-2015-016 eff. July 10, 2015.
Amended by SR-FINRA-2011-055 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-2011-029 eff. July 9, 2011.
Amended by SR-FINRA-2009-001 eff. Jan. 7, 2009.
Amended by SR-FINRA-2008-021 eff. Dec. 15, 2008.
Amended by SR-NASD-2006-052 eff. July 10, 2006.
Adopted by SR-NASD-2006-040 eff. July 10, 2006.
Selected Notices: 06-17, 08-57, 11-03.