FINRA Unlisted Securities Policy
On Sep. 14, FINRA proposed to amend assignment of OTC symbols.
- FINRA published regulatory notice 21-32, requesting comment on a proposed change to its policy relating to the assignment of OTC symbols to unlisted equity securities.
- In consideration of whether it should begin assigning OTC symbols to unlisted equity securities without a valid CUSIP identifier in limited and documented circumstances.
- Aims to facilitate firms' compliance, enhance transparency, more accurate audit trail.
- Policy Amendments
- Firms required by FINRA to report trades in OTC equity securities and restricted equity securities effected pursuant to securities act (SRT) Rule 144A, in 17 CFR 230.144A.
- Changes under consideration to permit the assignment of OTC symbols to OTC equity securities and Rule 144A restricted equity securities without a valid CUSIP identifier.
- Considered in limited circumstance where a member firm demonstrates its best efforts to obtain a CUSIP identifier, as well as provides documentation to identify the security.
- Those requesting OTC symbols for such securities would be required to document best efforts to obtain CUSIP identifier; data sufficient to identify and categorize a security.
- Comment Request
- Feedback requested by FINRA on the proposed policy, and on specific listed questions.
- Questions on other types of OTC securities without a CUSIP identifier to apply rule to.
- Whether OTC trade without CUSIP should be publicly distributed, concerns, mitigation.
- Should they be denoted with additional character; any additional factors to consider.
- Alternatives; unintended consequences of proposal; costs or benefits; due diligence.
- Comments on the proposed policy change required to be submitted by Nov. 15, 2021.
||B/D; Exch; IA
||RN 21-32, RFI, RF, 9/14/2021; SRT; Citation: 17 CFR 230.144A;
||Compliance; Operations; Product Administration; Reporting; Trade Reporting; Trading
||United States of America
||Derivatives; Equity; Securities
|Reg. Last Update
Last substantive update on 09/16/2021