The extension of OATS recording and reporting requirements will impact Nasdaq member firms, with certain exceptions.  Effective 10/3/11, FINRA OATS Rule 7450 will expand to all NMS Securities and exclude certain FINRA members from the definition of “Reporting Member.” 

Impact on Rules of NASDAQ OMX equities markets.   Under current Nasdaq Rule 6955 and BX Rule 6955, participants must comply with FINRA Rule 7450 as if such rule were a part of the exchange’s rules - with certain reporting differences for prop trading firms.  PSX Rule 3405 also requires order information to be submitted to FINRA’s OATS and similarly provides a reporting difference for prop trading firms.

Proprietary Trading will shall be required to comply with amended FINRA Rule 7450 as if such rule were part of a Nasdaq OMX exchange's rules with regards to recording and retaining OATS data, and must be able to provide the data upon request from Nasdaq OMX Regulation.  As such, Proprietary Trading Firms are to modify the data recorded and retained in accordance with the new requirements under amended FINRA Rule 7450 in order to comply with market rules.

However, the reporting requirements of FINRA Rule 7450 and NASDAQ Rule 6955, BX Rule 6955 and PSX Rule 3405 are not applicable to Proprietary Trading Firms.  For further details, go to:   [Equity RegAlert 11-10, 7/25/11]