E. Order Routing and Execution
This topic includes information and reporting requirements related to order routing and execution.
- Technical Specifications
- FAQE2. Are Industry Members required to report to the CAT the routing of an order if the routed order is rejected by the Industry Member or Participant to which the order is routed?
Yes, if the Industry Member routes an order to another Industry Member or a Participant, the Industry Member must report the routing of the order to the CAT. The details that must be reported for the routing of an order are set forth in Section 6.3(d)(ii) of the CAT NMS Plan, as applied to Industry Members by Section 6.4(d)(i) of the CAT NMS Plan. While all routes are required to be reported to CAT, Order Route events for orders that were rejected by the Industry Member or Participant to which the order was routed are not required to be reported in Phases 2a (equity) or 2b (options).
On a MEOT event, the only instances where the cancelFlag may be set to true is when a trade is cancelled because the trade report is rejected by the TRF/ORF or ADF beginning in Phase 2a, or when the trade is cancelled but the Trade event is not linked to the related trade report due to use of reportingExceptionCode ‘C’ beginning in Phase 2c.
- FAQE29. Pursuant to the SEC’s Exemptive Order dated June 11, 2020, instead of requiring Industry Members to record and report to CAT a cancelled trade indicator for trades that are cancelled, FINRA Facility Data submitted to the Central Repository by FINRA would be the source of the cancelled trade indicator. How should Industry Members report trade cancellations and corrections to CAT?
The CAT reporting requirements depend on what reporting error(s) the Industry Member made as well as whether the FINRA Facility allows a trade report to be corrected without cancelling the original trade report. The different FINRA Facilities have different functionality with regards to correcting and cancelling trade reports. For more information on reporting cancellations, corrections, and reversals to the TRF/ADF/ORF, see Section 311 of FINRA’s Trade Reporting FAQs.
- FAQE31. If an Industry Member routes an order to another Industry Member or exchange and it is rejected because a data element was malformed and the message was unable to be read or parsed, is the Industry Member required to report the related order events to CAT given that they might reject (for example, for a malformed symbol or optionID that is not on the CAT Reportable Equity/Options Securities Symbol Master list)?
No, order events for order messages that cannot be read or parsed by the destination venue are not required to be reported to CAT by the sender or receiver.
On Tuesday, September 29, 2020 at 10 am ET, Consolidated Audit Trail, LLC and FINRA CAT, LLC will host an industry webinar focusing on TRF Linkage.
Please note that FINRA CAT, LLC is now utilizing Zoom to conduct industry webinars. Please check your firewall to ensure your firm has the ability to view Zoom content. If you are unable to download and run Zoom, please click the "join from your browser" link. The presentation document and recording will be posted.Audio file
This FAQ has been retired. Please refer to FAQ E2.
- FAQE30. Pursuant to the SEC’s Exemptive Order dated June 11, 2020, instead of requiring Industry Members to record and report to CAT a cancelled trade indicator for trades that are cancelled, FINRA Facility Data submitted to the Central Repository by FINRA would be the source of the cancelled trade indicator. Does this apply if the trade is reversed in the FINRA Facility on a subsequent day?
Yes. FINRA rules and FINRA Facility system validations require that firms refer to the original trade report in the report of the reversal by including the control number assigned to the original report by the FINRA Facility and the original report date. Because the reversal is linked by reference to the original trade, the Industry Member is not required to report the reversal to CAT by deleting the original MEOT. The FINRA Facility Data reported to CAT by FINRA will be the source of the reversal.
This FAQ has been retired. Please refer to FAQ B58.
- FAQE3. BD A, an Industry Member CAT Reporter, receives a customer order for 10,000 shares and subsequently routes 2,000 shares of the order to Exchange A, another CAT Reporter. BD A’s trader or trading system subsequently modifies the price of the 2,000 share order routed to Exchange A. Is BD A required to report the modification of the 2,000 share order routed to Exchange A?
In Phase 2a, firm modifications of a previously routed order are not required to be reported to CAT if the destination to which the order was routed is a CAT Reporter. As a result, in the given example, the modification of the 2,000 share order sent to Exchange A would not be reportable by BD A, but would be reported to CAT by Exchange A. If the order had been routed to a foreign destination or other destination that is not a CAT Reporter, BD A would be required to report the modification to CAT.