Quick Answer
Beyond the data it records itself, an Industry Member reports received data, including the clearing broker identifier, the contra-side order identifier, a cancelled trade indicator, customer information, allocation reports and short sale marking. Reporting a trade to a FINRA facility relieves two of those fields, on conditions.
Recorded data is what the member records about its own order events. This second category, Received Industry Member Data, is defined by its own list under the consolidated audit trail (CAT) rules, and it carries two reliefs for a trade already reported to a FINRA facility plus the options market maker quote exception.
What Is Received Industry Member Data?
A second category covers Received Industry Member Data.
| Category | Detail |
|---|---|
| Clearing and contra | If the order is executed, in whole or in part, the SRO-Assigned market participant identifier of the clearing broker, if applicable, and the CAT-Order-ID of any contra-side orders |
| Cancelled trade | If the trade is cancelled, a cancelled trade indicator |
| Customer data | For original receipt or origination of an order, the Firm Designated ID for the relevant Customer, the Transformed Value for individual tax payer identification number or social security number (SSN), and the Customer Account Information and Customer Identifying Information for that Customer |
| Order types | For an alternative trading system operator, a list of all of its order types 20 days before those order types become effective, and any changes to its order types 20 days before those changes become effective |
| Trade identifier relief | The FINRA facility provisions set out below, under the section on when reporting to a FINRA facility changes the CAT fields |
| Allocation | An Allocation Report any time the Industry Member performs an Allocation to a Client Account, whether or not the Industry Member was the executing broker for the trade |
| Short sale marking | For the original receipt or origination of an order to sell an equity security, whether the order is for a short sale effected by a market maker in connection with bona fide market making activities in the security for which the locate and borrow rule's bona fide market making exception is claimed |
One narrowing sits inside the order type duty: an identifier is not required for market and limit orders that have no other special handling instructions. Short sales themselves are covered in the unit on handling and executing short sales.
Exam Tip: Gotchas
- The allocation report does not depend on who executed the trade. It is owed any time the member performs an allocation to a client account, whether or not the member was the executing broker.
- The short sale field is triggered by a sell order, not by every order. It attaches to the original receipt or origination of an order to sell an equity security, and asks whether the bona fide market making exception is being claimed.
When Does Reporting to a FINRA Facility Change the CAT Fields?
Where an Industry Member is required to submit and does submit a trade report, and if the trade is cancelled a cancellation, to a FINRA Trade Reporting Facility (TRF), the OTC Reporting Facility (ORF) or the Alternative Display Facility (ADF) under applicable rules, and is also required to report the corresponding execution or cancellation to the Central Repository, three provisions apply.
- The trade identifier must be reported. The member reports to the Central Repository the trade identifier it reported to the FINRA facility for the trade, when it reports the execution or the cancellation of the order, and that trade identifier must be unique.
- Clearing broker relief. If the order is executed in whole or in part and the member submits the trade report to the FINRA facility, it is not required to submit the market participant identifier of the clearing broker.
- The proviso: if it does not report the clearing number of the clearing broker to that facility for a trade, or does not report the unique trade identifier to the Central Repository, then it must record and report to the Central Repository the clearing number of the clearing broker as well as information about the contra party to the trade.
- Cancelled trade relief. If the trade is cancelled and the member submits the cancellation to the FINRA facility, it is not required to submit the cancelled trade indicator.
- The proviso: if it does not report a cancellation for a cancelled trade to that facility, or does not report the unique trade identifier, then it must record and report to the Central Repository a cancelled trade indicator as well as a cancelled trade timestamp.
Reporting a trade to the designated facility itself is covered in the unit on reporting trades to the designated reporting facility.
Exam Tip: Gotchas
- Both reliefs are conditional, and either branch takes one away. The clearing broker relief is lost if the member does not report the clearing number to that facility, or does not report the unique trade identifier to the Central Repository. The cancelled trade relief is lost if it does not report the cancellation to that facility, or does not report that identifier.
- The relief covers the clearing broker's identifier, not the clearing relationship. It spares the member from submitting the clearing broker's identifier to the Central Repository, and it is lost if the member does not report the clearing number to the FINRA facility.
Which Reports Does an Options Market Maker Not Have to Make?
An Industry Member that is an Options Market Maker is not required to report to the Central Repository the Industry Member Data regarding the routing, modification or cancellation of its quotes in Listed Options.
Instead, it reports to the Exchange the time at which its quote in a Listed Option is sent to the Exchange, and, if applicable, any subsequent quote modification time or cancellation time when the modification or cancellation is originated by the Options Market Maker.
Exam Tip: Gotchas
- The exception is about quotes, not orders. It reaches the routing, modification or cancellation of quotes in listed options, and leaves every order-side duty in place.
- The duty moves rather than disappears. The time information goes to the Exchange instead of to the Central Repository.
What Should You Check on Exam Day?
- Split recorded data from received data; clearing identifiers, customer information and allocation reports sit in the received category.
- Confirm both branches before allowing a FINRA facility relief: the clearing number or cancellation went to the facility, and the unique trade identifier went to the Central Repository.
- On an allocation, apply the report duty whether or not the member was the executing broker for the trade.
- Check the short sale field is triggered by an order to sell an equity security, not by every order.
- For an Options Market Maker quote, send the time to the Exchange rather than to the Central Repository.