Responding to Firm Requests from More System Preparation Time.

[ by Howard Haykin ]

FINRA notified the SEC that plans to delay implementation of new FINRA Rule 5350, governing Stop Orders,  The SEC approved that proposed rule last year and FINRA had announced an effective date for new Rule 5350 of 1/21/13.  [Refer to original FINRA Rule Filing 12-26.]

FINRA now intends to push back implementation until 3/4/13.  There are no changes to the text of the rule. To effect the change in dates, FINRA filed this latest rule filing for immediate effectiveness.

Purpose of the Delay.   Last September, the SEC approved FINRA Rule 5350 (Stop Orders), a new rule that replaces the stop order provisions of FINRA Rule 6140(h) and that generally provides that any order labeled as a “stop order” or a “stop limit order” must be triggered based upon a transaction at the stop price, but permits firms to offer alternative order types with different triggers (e.g., a stop order triggered by a quotation at the stop price) so long as, among other things, the order type is not labeled as a stop order and is clearly distinguishable from a stop order.

However, FINRA recently has received requests from industry participants for additional time to prepare for compliance with the new rule.  Members have indicated that, among other things, Hurricane Sandy and code freezes occurred during the preparation timeframe, which contributed to delays in members’ efforts to finalize standard order nomenclature and order messaging standards.  

Accordingly, in light of recent events and in response to members’ requests for additional time, FINRA is
extending the January 21, 2013 effective date announced in Regulatory Notice 12-50 until March 4, 2013.
 

For further details, go to:   [ FINRA Rule Filing 13-4,  1/9/13 ].