On July 23, 2009, the Securities and Exchange Commission ("SEC") approved changes to Financial Industry Regulatory Authority, Inc. ("FINRA") trade reporting rules1 applicable to over-the-counter ("OTC") transactions in equity securities executed outside normal market hours.2 The amended trade reporting rules require that any trade executed during the hours that a FINRA Facility3 is closed must be reported within 15 minutes of the opening of the FINRA Facility. FINRA Facilities open at 8:00 am; accordingly trades executed outside of normal market hours must be submitted by 8:15 am. The amended trade reporting rules also harmonize the trade reporting requirements applicable to "outside normal market hours" transactions across all FINRA Facilities. The effective date for the amended trade reporting rules is January 11, 2010.

Set forth below is a summary of the amended trade reporting rules.

FINRA Trade Reporting Rules

The amended trade reporting rules require special treatment when reporting trades that are executed outside normal market hours. If the transaction occurs while the FINRA Facilities are open, the member must report that trade within 90 seconds of execution. The amended trade reporting rules apply if the transaction occurs while the FINRA Facilities are closed. The member must now report such trades with an outside normal market hours trade report modifier of ".T". If the trade was executed between midnight and 8:00 am the trade must be reported on trade date by 8:15 am. If the trade was executed between the close of a FINRA Facility4 and midnight, the trade must be reported on an “as/of” basis the following business day (T+1) by 8:15 am. If either category of trades is reported after 8:15 am the trade must be reported with a late, outside-normal-market-hours trade report modifier of ".U".

The other amendment to the trade reporting rules is a technical change to the FINRA/NASDAQ TRF and the ORF. Prior to the rule changes, these facilities did not allow a trade modifier designating the trade as executed outside normal market hours to be submitted during normal market hours. For example, under current rules, if a member executes a trade at 9:29:00 am and reports the trade at 9:30:15 am (in compliance with the 90-second reporting requirement under FINRA rules) with .T trade modifier, the FINRA/Nasdaq TRF and ORF will reject the trade report. The amended trade reporting rules for these two trade reporting facilities now permit firms to submit outside normal market hours trade reports to the two facilities throughout the day. The other two TRFs — the ADF and FINRA/NYSE TRF — already permit these reports to be submitted during normal market hours.

Below is a chart that summarizes the amended trade reporting rules.