Time-Stamping Requirements

The receipt stamp is the anchor: an order that is never stamped on receipt has broken the rule, whatever else the firm records.

The Receipt Stamp: Required on Every Order

The receipt stamp fixes the moment the order left the customer's hands.

• When a Futures Commission Merchant (FCM) or Introducing Broker (IB) receives a customer order that cannot be entered into the trade-matching engine at once, it must immediately prepare a written record of the order and time-stamp the date and time of receipt, to the nearest minute.
• The record is prepared when the order arrives, not later from memory, so the receipt time cannot be adjusted after the fact.

The Second Stamp: For Option Orders and the Execution Record

The order's execution is also captured, but the second stamp on the ticket is specific.

• For a commodity option order, the firm records a second time stamp: the date and time the order is transmitted for execution.
• For every order, the execution is recorded as part of the required order record, and the floor broker or executing party records the date and time of execution. Together with the receipt stamp, this builds the audit trail.

Why It Matters: The Audit Trail

The stamps exist to prove the order was handled cleanly.

• The receipt time and the execution record create an audit trail showing an order was handled in proper sequence and was not delayed, front-run, or reordered to a customer's disadvantage.
• Order records, like other required books and records, are retained for five years.

Think of it this way: the receipt stamp is a package's "picked up" scan and the execution record is its "delivered" scan. Without the "picked up" scan fixed at the door, no one can prove the order moved on time, so no one can quietly slip their own trade ahead of the customer's.

Exam Tip: Gotchas

• The receipt stamp is required on every order, immediately and to the nearest minute. The written order record is not prepared later from memory; it is created and stamped when the order comes in. A choice that skips the receipt stamp is wrong.
• The second ticket stamp, for the time transmitted for execution, applies to commodity option orders. For any order, the execution time is still recorded, and the executing party stamps the time of execution.

What Should You Check on Exam Day?

• Can you explain why the receipt stamp must go on immediately, to the nearest minute?
• Do you know which orders get a second stamp for the time transmitted for execution?
• Can you state how the receipt time and execution record build an audit trail against front-running?
• Do you know how long order records must be retained?