Reporting Trades to the Designated Reporting Facility

Where a report goes, who files it, and how fast.

Which One-Liners Win Points?

• Destination follows the security. An off-exchange national market system (NMS) stock trade goes to the Alternative Display Facility (ADF) or either Trade Reporting Facility (TRF); an off-exchange OTC equity or restricted equity security trade goes to the OTC Reporting Facility (ORF).
• The executing party reports between two members: it receives an order, or is presented one against its quote, does not re-route it, and executes it. Against a customer or non-member, the member reports.
• The sell side breaks a tie only where both members meet that definition, and reports unless the parties agree otherwise and the sell-side member contemporaneously documents the agreement.
• Participation is mandatory at the ADF, FINRA/Nasdaq TRF and ORF for a member obligated to report an OTC transaction, unless it has an alternative electronic mechanism under FINRA rules for reporting and clearing it. The FINRA/New York Stock Exchange (NYSE) TRF has no such mandate.
• An alternative trading system (ATS) needs a separate market participant identifier (MPID) for each system, carrying every trade executed within it, except a clearing-only, non-regulatory report, and nothing else.
• Riskless principal is one agency-style report excluding the mark-up, mark-down, commission-equivalent or other fee, or a last sale report of the initial leg plus a "riskless principal" report of the offsetting leg: clearing-only where a clearing report is needed, non-tape, non-clearing where not.
• The system's record binds. A participant the system reports as a party to a trade treated as locked-in and sent to clearing must act as principal and honor it on the scheduled settlement date, notwithstanding any other agreement.

Which Numbers Matter Most?

When Is an Outside-Hours Trade Due?

• Late pre-market and after hours: 10 seconds. The ADF runs 8:00 a.m. to 6:30 p.m., both TRFs 4:00 a.m. to 8:00 p.m., the ORF 8:00 a.m. to 8:00 p.m.
• Early pre-market (from midnight to that opening): by 8:15 a.m. on trade date, or 4:15 a.m. at the TRFs.
• Overnight or a non-business day: next business day by the same 8:15 a.m. or 4:15 a.m., designated "as/of".
• Every report in these windows carries the outside-hours modifier.
• At the ORF these windows cover OTC equity securities. A restricted equity security trade under the qualified institutional buyer resale safe harbor: executed from midnight to 8:00 p.m., same business day; later, or on a non-business day, by 8:00 p.m. the next business day, "as/of".

Which Gotchas Trip Students Up?

• Ten seconds is a ceiling. Purposely withholding a report, for example until the last permissible second, is never allowed.
• Late is a status, not a sanction. A pattern or practice of unexcused late reporting (repeated, late, without reasonable justification or exceptional circumstances) may breach commercial honor standards, and FINRA views noncompliance as a rule violation.
• Only one cancellation deadline runs on 10 seconds: a normal-hours trade cancelled at or before 4:00 p.m. that day. The rest run to the cut-off.
• Stop stock and prior reference reports carry two times, unless the trade is executed and reported within 10 seconds of the agreement on the Stop Stock Price or from the prior reference point in time, when the modifier shall not be appended.
• The FINRA/NYSE TRF takes only locked-in trades. Elsewhere, a declined trade never locks in automatically.

One-Breath Recap

An off-exchange national market system stock trade goes to the Alternative Display Facility or either Trade Reporting Facility, and an off-exchange over-the-counter equity or restricted equity trade goes to the OTC Reporting Facility. Between two members the executing party reports; where both qualify, the sell side reports unless the parties agree otherwise and the sell side contemporaneously documents it. A national market system stock or over-the-counter equity trade executed in normal market hours is reported as soon as practicable but no later than 10 seconds after execution. A missed deadline is marked late, and a pattern or practice of unexcused late reporting may breach commercial honor standards.

Need more than the recap? Read the full Reporting Trades to the Designated Reporting Facility unit.