Notice2025-13732
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 6860 of FINRA's Compliance Rule To Be Consistent With the Exemptive Relief Granted by the Commission From Certain Provisions Related to Timestamp Granularity
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Published
July 22, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 138 (Tuesday, July 22, 2025)</title>
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[Federal Register Volume 90, Number 138 (Tuesday, July 22, 2025)]
[Notices]
[Pages 34552-34554]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-13732]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-103491; File No. SR-FINRA-2025-012]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend Rule 6860 of FINRA's Compliance Rule To
Be Consistent With the Exemptive Relief Granted by the Commission From
Certain Provisions Related to Timestamp Granularity
July 17, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that
on July 16, 2025, Financial Industry Regulatory Authority, Inc.
(``FINRA'') filed with the Securities and Exchange Commission (``SEC''
or ``Commission'') the proposed rule change as described in Items I and
II below, which Items have been prepared by FINRA. The Commission is
publishing this notice to solicit comments on the proposed rule change
from interested persons.
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\1\ 15 U.S.C. 78s(b)(1).
\2\ 17 CFR 240.19b-4.
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I. Self-Regulatory Organization's Statement of the Terms of Substance
of the Proposed Rule Change
FINRA is proposing to amend FINRA Rule 6860 (Time Stamps) of
FINRA's compliance rule (``CAT Compliance Rule'') regarding the
National Market System Plan Governing the Consolidated Audit Trail (the
``CAT NMS Plan'' or ``Plan'') \3\ to be consistent with the exemptive
relief granted by the Commission from certain provisions of the CAT NMS
Plan related to time stamp granularity (``2025 Timestamp Granularity
Exemption'').\4\ Specifically, FINRA proposes to update the expiration
date of the exemption in Rule 6860(a)(2) from April 8, 2025 to April 8,
2030.
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\3\ Unless otherwise specified, capitalized terms used in this
rule filing are defined as set forth in the CAT Compliance Rule.
\4\ See Securities Exchange Act Rel. No. 102980 (May 2, 2025),
90 FR 19334 (May 7, 2025).
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The text of the proposed rule change is available on FINRA's
website at <a href="https://www.finra.org">https://www.finra.org</a> and at the principal office of FINRA.
II. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
In its filing with the Commission, FINRA included statements
concerning the purpose of and basis for the proposed rule change and
discussed any comments it received on the proposed rule change. The
text of these statements may be examined at the places specified in
Item IV below. FINRA has prepared summaries, set forth in sections A,
B, and C below, of the most significant aspects of such statements.
A. Self-Regulatory Organization's Statement of the Purpose of, and
Statutory Basis for, the Proposed Rule Change
1. Purpose
The purpose of this proposed rule change is to amend Rule 6860 of
the CAT Compliance Rule to be consistent with the 2025 Timestamp
Granularity Exemption. Under the 2025 Timestamp Granularity Exemption,
the Commission extended the exemptive relief pursuant to which Industry
Members that capture time stamps in increments more granular than
nanoseconds must truncate the time stamps after the nanosecond level
for submission to CAT, rather than rounding such time stamps up or
down, from April 8, 2025 to April 8, 2030. Accordingly, FINRA proposes
to update the expiration date of Rule 6860(a)(2) from April 8, 2025 to
April 8, 2030.
On February 3, 2020, the Participants filed with the Commission a
request for exemptive relief from the requirement in Section 6.8(b) of
the CAT NMS Plan to permit each Participant, through its CAT Compliance
Rule, to require that, to the extent that its Industry Members utilize
time stamps in increments finer than nanoseconds in their order
[[Page 34553]]
handling or execution systems, such Industry Members utilize such finer
increment when reporting CAT Data to the Central Repository.\5\ On
April 8, 2020, the Participants received the requested exemptive
relief.\6\ As a condition to this exemption, the Participants, through
their CAT Compliance Rules, required Industry Members that capture time
stamps in increments more granular than nanoseconds to truncate the
time stamps after the nanosecond level for submission to CAT, rather
than rounding up or down in such circumstances. The exemption was to
remain in effect for five years, until April 8, 2025.
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\5\ See Letter from Michael Simon, CAT NMS Plan Operating
Committee Chair, to Vanessa Countryman, Secretary, SEC, dated
February 3, 2020, re: Request for Exemption from Certain Provisions
of the National Market System Plan Governing the Consolidated Audit
Trail related to Granularity of Timestamps and Relationship
Identifiers.
\6\ See Securities Exchange Act Release No. 88608 (April 8,
2020), 85 FR 20743 (April 14, 2020).
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In 2020, FINRA amended paragraph (a)(2) of Rule 6860 to reflect
this exemptive relief.\7\ Specifically, FINRA amended Rule 6860(a)(2)
to state the following:
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\7\ See Securities Exchange Act Release No. 89119 (June 22,
2020), 85 FR 38468 (June 26, 2020) (Notice of Filing and Immediate
Effectiveness of File No. SR-FINRA-2020-018).
Subject to paragraph (b), to the extent that any Industry
Member's order handling or execution systems utilize time stamps in
increments finer than milliseconds, such Industry Member shall
record and report Industry Member Data to the Central Repository
with time stamps in such finer increment up to nanoseconds;
provided, that Industry Members that capture time stamps in
increments more granular than nanoseconds must truncate the time
stamps after the nanosecond level for submission to CAT, rather than
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rounding such time stamps up or down, until April 8, 2025.
The language of Rule 6860(a)(2) has not been changed since that
time.
The exemption granted in 2020, however, would no longer be in
effect after April 8, 2025, unless the SEC extended the relief.
Accordingly, on March 24, 2025, the Participants filed with the
Commission a request to extend the existing exemptive relief for
another five years, until April 8, 2030.\8\ On May 2, 2025, the
Participants received the requested exemptive relief from the
Commission (the 2025 Timestamp Granularity Exemption).\9\ As a
condition to this exemption, the Participants, through their CAT
Compliance Rules, are required to require Industry Members that capture
time stamps in increments more granular than nanoseconds to truncate
the time stamps after the nanosecond level for submission to CAT,
rather than rounding up or down in such circumstances. The SEC granted
the 2025 Timestamp Granularity Exemption for a period of five years,
until April 8, 2030.
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\8\ See letter from Brandon Becker, CAT NMS Plan Operating
Committee Chair, to Vanessa Countryman, Secretary, SEC, dated March
24, 2025 (the ``March 24, 2025 Exemption Request'').
\9\ See supra note 5.
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Accordingly, FINRA proposes to amend its CAT Compliance Rule to
reflect the extended period set forth in the 2025 Timestamp Granularity
Exemption, replacing the reference to April 8, 2025 with April 8, 2030.
Specifically, FINRA proposes to amend paragraph (a)(2) of Rule 6860 to
state:
Subject to paragraph (b) of this Rule, to the extent that any
Industry Member's order handling or execution systems utilize time
stamps in increments finer than milliseconds, such Industry Member
shall record and report Industry Member Data to the Central
Repository with time stamps in such finer increment up to
nanoseconds; provided, that Industry Members that capture time
stamps in increments more granular than nanoseconds must truncate
the time stamps after the nanosecond level for submission to CAT,
rather than rounding such time stamps up or down, until April 8,
2030.\10\
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\10\ FINRA is also making a technical change by adding ``of this
Rule'' to conform to FINRA Rule format style.
FINRA has filed the proposed rule change for immediate
effectiveness and has requested that the SEC waive the requirement that
the proposed rule change not become operative for 30 days after the
date of the filing, so FINRA can implement the proposed rule change
immediately.
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\11\ which requires, among
other things, that FINRA rules must be designed to prevent fraudulent
and manipulative acts and practices, to promote just and equitable
principles of trade, and, in general, to protect investors and the
public interest, and Section 15A(b)(9) of the Act,\12\ which requires
that FINRA rules not impose any burden on competition that is not
necessary or appropriate.
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\11\ 15 U.S.C. 78o-3(b)(6).
\12\ 15 U.S.C. 78o-3(b)(9).
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FINRA believes that this proposed rule change is consistent with
the Act because it is consistent with the exemptive relief that has
been in place for five years, is consistent with the 2025 Timestamp
Granularity Exemption, and is designed to assist FINRA and Industry
Members in meeting regulatory obligations pursuant to the Plan. In
approving the Plan, the SEC noted that the Plan ``is necessary and
appropriate in the public interest, for the protection of investors and
the maintenance of fair and orderly markets, to remove impediments to,
and perfect the mechanism of a national market system, or is otherwise
in furtherance of the purposes of the Act.'' \13\ To the extent that
this proposed rule change implements the Plan, including exemptive
relief related thereto, and applies specific requirements to Industry
Members, FINRA believes that this proposed rule change furthers the
objectives of the Plan, as identified by the SEC, and is therefore
consistent with the Exchange Act.
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\13\ See Securities Exchange Act Release No. 79318 (November 15,
2016), 81 FR 84696, 84697 (November 23, 2016).
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B. Self-Regulatory Organization's Statement on Burden on Competition
FINRA does not believe that the proposed rule change will result in
any burden on competition that is not necessary or appropriate in
furtherance of the purposes of the Act. FINRA notes that the proposed
rule change is consistent with the exemptive relief that has been in
place for five years, is consistent with the 2025 Timestamp Granularity
Exemption, and is designed to assist FINRA in meeting its regulatory
obligations pursuant to the Plan. FINRA also notes that the amendment
to the CAT Compliance Rule will apply equally to all Industry Members
that trade NMS Securities and OTC Equity Securities. In addition, all
national securities exchanges and FINRA are proposing these amendments
to their CAT Compliance Rules. Therefore, this filing is not a
competitive rule filing, and, therefore, does not impose a burden on
competition.
C. Self-Regulatory Organization's Statement on Comments on the Proposed
Rule Change Received From Members, Participants, or Others
Written comments were neither solicited nor received.
III. Date of Effectiveness of the Proposed Rule Change and Timing for
Commission Action
FINRA has filed the proposed rule change pursuant to Section
19(b)(3)(A) of the Act \14\ and Rule 19b-4(f)(6) \15\ thereunder.
Because the foregoing proposed rule change does not: (i) significantly
affect the protection of
[[Page 34554]]
investors or the public interest; (ii) impose any significant burden on
competition; or (iii) become operative for 30 days from the date on
which it was filed, or such shorter time as the Commission may
designate, it has become effective pursuant to Section 19(b)(3)(A) of
the Act \16\ and Rule 19b-4(f)(6) \17\ thereunder.
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\14\ 15 U.S.C. 78s(b)(3)(A).
\15\ 17 CFR 240.19b-4(f)(6).
\16\ 15 U.S.C. 78s(b)(3)(A).
\17\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)(iii)
requires FINRA to give the Commission written notice of its intent
to file the proposed rule change, along with a brief description and
text of the proposed rule change, at least five business days prior
to the date of filing of the proposed rule change, or such shorter
time as designated by the Commission. FINRA has satisfied this
requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \18\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\19\ the Commission
may designate a shorter time if such action is consistent with
protection of investors and the public interest. FINRA has asked the
Commission to waive the 30-day operative delay so that the proposed
rule change may become operative immediately upon filing. The
Commission believes that waiving the 30-day operative delay is
consistent with the protection of investors and the public interest
because the proposal seeks to amend FINRA's CAT Compliance Rule to
reflect the expiration date for exemptive relief relating to timestamp
granularity approved by the Commission on May 2, 2025, and the proposal
does not introduce any novel regulatory issues. Accordingly, the
Commission designates the proposed rule change to be operative upon
filing.\20\
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\18\ 17 CFR 240.19b-4(f)(6).
\19\ 17 CFR 240.19b-4(f)(6)(iii).
\20\ For purposes only of waiving the 30-day operative delay,
the Commission also has considered the proposed rule's impact on
efficiency, competition, and capital formation. See 15 U.S.C.
78c(f).
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At any time within 60 days of the filing of the proposed rule
change, the Commission summarily may temporarily suspend such rule
change if it appears to the Commission that such action is necessary or
appropriate in the public interest, for the protection of investors, or
otherwise in furtherance of the purposes of the Act. If the Commission
takes such action, the Commission will institute proceedings to
determine whether the proposed rule change should be approved or
disapproved.
IV. Solicitation of Comments
Interested persons are invited to submit written data, views and
arguments concerning the foregoing, including whether the proposed rule
change is consistent with the Act. Comments may be submitted by any of
the following methods:
Electronic Comments
<bullet> Use the Commission's internet comment form (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#0371766f662e606c6e6e666d7770437066602d646c75"><span class="__cf_email__" data-cfemail="2250574e470f414d4f4f474c5651625147410c454d54">[email protected]</span></a>. Please include
file number SR-FINRA-2025-012 on the subject line.
Paper Comments
<bullet> Send paper comments in triplicate to Secretary, Securities
and Exchange Commission, 100 F Street NE, Washington, DC 20549-1090.
All submissions should refer to file number SR-FINRA-2025-012. This
file number should be included on the subject line if email is used. To
help the Commission process and review your comments more efficiently,
please use only one method. The Commission will post all comments on
the Commission's internet website (<a href="https://www.sec.gov/rules/sro.shtml">https://www.sec.gov/rules/sro.shtml</a>). Copies of the filing also will be available for inspection
and copying at the principal office of FINRA. Do not include personal
identifiable information in submissions; you should submit only
information that you wish to make available publicly. We may redact in
part or withhold entirely from publication submitted material that is
obscene or subject to copyright protection.
All submissions should refer to file number SR-FINRA-2025-012 and
should be submitted on or before August 12, 2025.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\21\
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\21\ 17 CFR 200.30-3(a)(12) and (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-13732 Filed 7-21-25; 8:45 am]
BILLING CODE 8011-01-P
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