[ by Howard Haykin ]

FINRA has extended for another year the pilot period regarding the use of multiple MPIDs on FINRA Facilities (Market Participant Identifiers).  FINRA filed for immediate effectiveness in the rule filing submitted to the SEC.  This means that the following current rules permitting use of multiple MPIDs will continue through 1/24/14:

• FINRA Rule 6160  - with respect to Trade Reporting Facilities ("TRFs");
• FINRA Rule 6170  - with respect to the Alternative Display Facility ("ADF");
• FINRA Rule 6480  - with respect to the OTC Reporting Facility ("ORF").

Purpose for Multiple MPIDs.   The pilot period for all 3 of the above rules is scheduled to expire 1/25/13.  FINRA decided to extend the program for another year as there continues to be legitimate business reasons for members to maintain multiple MPIDs on FINRA facilities.  Further, FINRA intends to submit a rule proposal that would make the rules permanent. 

       Rule 6160 provides that any Trade Reporting Facility (TRF) Participant that wishes to use more than one MPID for purposes of reporting trades to a TRF must submit a written request to, and obtain approval from, FINRA Operations for such additional MPIDs.  FIRNA views the opportunity of, and trade reporting with, multiple MPIDs as a privilege and not a right. 

A TRF Participant must identify the purpose(s) and system(s) for which the multiple MPIDs will be used. If FINRA determines that the use of multiple MPIDs is detrimental to the marketplace, or that a TRF Participant is using one or  more additional MPIDs improperly or for other than the purpose(s) identified by the Participant, FINRA staff retains full  discretion to limit or withdraw its grant of the additional MPID(s) to such TRF Participant for purposes of reporting trades to a TRF.  

Rule 6160 was first approved by the SEC in 2006 on a pilot basis.  The pilot period has been extended several times since the rule was originally adopted.

      Rule 6170 provides that a Registered Reporting ADF ECN may request additional MPIDs for displaying quotes and orders and reporting trades through the ADF trade reporting facility, TRACS, for any ADF-Eligible Security.  Among other things, Registered Reporting ADF ECNs are prohibited from using an additional MPID to accomplish indirectly what they are prohibited from doing directly through their Primary MPID.  The procedures for requesting, and the restrictions surrounding the use of, multiple MPIDs are set forth in Supplementary Material to the rule.

The SEC approved Rule 6170 on a pilot basis on 8/11/06, and the pilot period has been extended several times since the rule was originally adopted.

      Rule 6480, like Rule 6160, provides that any member that wishes to use more than one MPID for purposes of quoting an OTC Equity Security or reporting trades to the ORF must submit a written request to, and obtain approval from, FINRA Operations for such additional MPIDs.  A member that posts a quotation in an OTC Equity Security and reports to a FINRA system a trade resulting from such posted quotation must utilize the same MPID for reporting purposes.Here, too, FINRA considers the issuance of, and trade reporting with, multiple MPIDs to be a privilege and not a right.

FINRA adopted Rule 6480 on a pilot basis on 7/23/09 and has since extended the pilot several times.

For  further details, go to:   [ FINRA Rule Filing 13-8, 1/24/13 ].