On August 8, the Financial Industry Regulatory Authority issued Regulatory Notice 16-28, which discusses the Securities and Exchange Commission’s approval of new FINRA Rule 4554 (Alternative Trading Systems – Recording and Reporting Requirements of Order and Execution Information for NMS Stocks). Once adopted, Rule 4554 would require alternative trading systems (ATSs) to report additional ATS-specific data elements in their Order Audit Trail System (OATS) reports for orders in National Market System (NMS) securities.
FINRA Rule 4554 would establish four additional categories of reporting requirements for ATSs: (1) data that must be reported at the time of order receipt; (2) data that must be reported at the time of order execution; (3) data that displays subscriber orders; and (4) data specific to ATSs that are registered as Alternative Display Facility Trading Centers. In addition, ATSs would be required to report specific information related to received orders, the execution of orders to OATS and orders displayed outside ATS reports.
Under the new rule, ATSs also would be required to provide to FINRA all new order types 20 days before they become effective. Any changes in such order types also would need to be provided to FINRA 20 days before their effective date.
FINRA Rule 4554 would become effective on November 7. To ensure that FINRA can map order identifiers to specific order types prior to the effective date, all ATSs must provide FINRA with a list of their current order types no later than October 19.
Regulatory Notice 16-28 is available here.