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J. OTC Equity Securities
This topic includes information and reporting requirements related to orders involving OTC equity securities.
- FAQJ3. What are the reporting obligations for OTC Link messages directed by an OTC Link ATS subscriber (that is also a Global OTC subscriber) to a Global OTC quote displayed on the OTC Link ATS?
OTC Link trade negotiation messages directed by an OTC Link ATS subscriber to a Global OTC quote meet the definition of an order. Because an immediately actionable order is sent to Global OTC as the result of an OTC Link message, the OTC Link ATS subscriber must report the order and route to Global OTC, even if the order is not ultimately executed.
On Wednesday, September 18, 2019, at 4:15 pm ET, Consolidated Audit Trail, LLC and FINRA CAT, LLC will host an industry webinar on OTC Equities.
The event will be held at 4:15 pm ET. 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. The presentation document and recording will be posted.Audio file
- FAQJ1. Are quotations in OTC Equity Securities that are sent by an Industry Member to foreign exchanges reportable to CAT?
Quotations in OTC equity securities sent to foreign exchanges are required to be reported only in those instances where a resulting execution is subject to the transaction reporting requirements in FINRA Rule 6622. The requirements of FINRA Rule 6622 do not apply to transactions in foreign equity securities that are not NMS Stocks provided that: (1) the transaction is executed on and reported to a foreign securities exchange; or (2) the transaction is executed over the counter in a foreign country and is reported to the regulator of securities markets in that country.
As a general matter, based on the Participants current understanding of OTC Link functionality the Participants consider the use of OTC Link messages to be negotiations since these messages are not immediately actionable and require trader intervention before a trade can occur. Therefore, no CAT reporting obligation exists until the terms and conditions of a trade have been agreed upon.