Notice2025-23666
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rules 5220, 5320, 6220, 6272, 6279, 6320A, 6320B, and 7620A To Conform to the New Definition of “Round Lot” Adopted by the Commission Under Regulation NMS
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
December 23, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 244 (Tuesday, December 23, 2025)</title>
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[Federal Register Volume 90, Number 244 (Tuesday, December 23, 2025)]
[Notices]
[Pages 60201-60203]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-23666]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104441; File No. SR-FINRA-2025-015]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend FINRA Rules 5220, 5320, 6220, 6272, 6279,
6320A, 6320B, and 7620A To Conform to the New Definition of ``Round
Lot'' Adopted by the Commission Under Regulation NMS
December 18, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(the ``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\
notice is hereby given that on December 3, 2025, the Financial Industry
Regulatory Authority, Inc. (``FINRA'') filed with the Securities and
Exchange Commission (the ``Commission'') the proposed rule change as
described in Items I and II below, which Items have been prepared by
FINRA. FINRA filed the proposal as a ``non-controversial'' proposed
rule change pursuant to Section 19(b)(3)(A)(iii) of the Act \3\ and
Rule 19b-4(f)(6) thereunder.\4\ 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.
\3\ 15 U.S.C. 78s(b)(3)(A)(iii).
\4\ 17 CFR 240.19b-4(f)(6).
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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 Rules 5220, 5320, 6220, 6272,
6279, 6320A, 6320B, and 7620A to conform to the new definition of
``round lot'' adopted by the Commission under Regulation NMS.
The text of the proposed rule change is available on FINRA's
website at <a href="http://www.finra.org">http://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
Background
In 2020, the Commission adopted amendments to Regulation NMS to
modernize the information provided within the national market system
for NMS stocks.\5\ Prior to the MDI Rule amendments to Regulation NMS,
``round lot'' was not defined in the Exchange Act or SEC rules.
Instead, exchange rules typically defined a round lot as 100 shares,
but also allowed the exchange, or the primary listing exchange for the
security, discretion to define it otherwise.\6\ Among other things, the
MDI Rule amended Rule 600(b) of Regulation NMS to add a new definition
of ``round lot'' that assigns each NMS stock a round lot size based on
the stock's average closing price. In light of delays in the
implementation of the MDI Rule, including the new definition of ``round
lot,'' on September 18, 2024, the Commission adopted further amendments
to Regulation NMS that, among other things, revised and accelerated the
implementation of the new round lot definition under Rule 600(b)(93) to
implement the new round lot definition on November 3, 2025, the first
business day of November 2025.\7\ As adopted under the 2024 NMS
Amendments, the new definition of ``round lot'' in Rule 600(b)(93) of
Regulation NMS assigns each NMS stock a round lot size based on the
stock's average closing price on the primary listing exchange during
the prior Evaluation Period, ranging from 100 shares for NMS stocks
priced $250.00 or less to one share for NMS stocks priced $10,000.01 or
more.\8\
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\5\ See Securities Exchange Act Release No. 90610 (December 9,
2020), 86 FR 18596 (April 9, 2021) (File No. S7-03-02) (the ``Market
Data Infrastructure Rule'' or ``MDI Rule'').
\6\ See 2024 NMS Amendments, infra note 7, 89 FR 81620, 81625
n.66. In practice, very few NMS stocks have a round lot size other
than 100 shares. See 2024 NMS Amendments, infra note 7, 89 FR 81620,
81625 n.67 and accompanying text.
\7\ See Regulation NMS: Minimum Pricing Increments, Access Fees,
and Transparency of Better Priced Orders, Securities Exchange Act
Release No. 101070 (September 18, 2024), 89 FR 81620 (October 8,
2024) (File No. S7-30-22) (the ``2024 NMS Amendments'').
\8\ See 17 CFR 242.600(b)(93). The ``Evaluation Period,'' as
defined in Rule 600(b)(93)(iii) of Regulation NMS, means (i) all
trading days in March for the round lot assigned on the first
business day of May and (ii) all trading days in September for the
round lot assigned on the first business day of November, during
which the average closing price of an NMS stock on the primary
listing exchange shall be measured by the primary listing exchange
to determine the round lot for each NMS stock. Under Rule
600(b)(93)(iv), the round lot assigned is operative on (i) the first
business day of May for the March Evaluation Period and continues
through the last business day of October for the calendar year and
(ii) the first business day of November for the September Evaluation
Period and continues through the last business day of April of the
next calendar year. Under Rule 600(b)(93)(ii), any security that
becomes an NMS stock during an operative period is assigned a round
lot of 100 shares.
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Several FINRA rules use the term ``normal unit of trading'' as the
equivalent to the term ``round lot'' as used in exchange rules. As
described in greater detail below, FINRA is proposing to amend these
rules to conform to the new definition of ``round lot'' for NMS stocks
under Regulation NMS.\9\
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\9\ The new definition of ``round lot'' in Rule 600(b)(93) of
Regulation NMS applies only to NMS stocks. The proposed conforming
changes to FINRA rules are similarly limited to NMS stocks and do
not affect the normal unit of trading as it may be applied to any
other type of security.
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Conforming Changes to FINRA Rules
FINRA Rule 5220 (Offers at Stated Prices) provides that no member
shall make an offer to buy from or sell to any person any security at a
stated price unless such member is prepared to purchase or sell, as the
case may be, at such price and under such conditions as are stated at
the time of such offer to buy or sell. Supplementary Material .01 to
Rule 5220 (Firmness of Quotations) discusses the expectations for
making a ``firm trading market'' in a security,
[[Page 60202]]
noting that a member ``is expected at least to buy or sell a normal
unit of trading in the quoted stock at its then prevailing quotations
unless clearly designated as not firm or firm for less than a normal
unit of trading when supplied by the member.'' The proposed rule change
would add a new sentence to Supplementary Material .01 to Rule 5220 to
clarify that for purposes of Rule 5220, a ``normal unit of trading''
for an NMS stock means the ``round lot'' assigned to such NMS stock
pursuant to Rule 600(b) of SEC Regulation NMS.
FINRA Rule 5320 (Prohibition Against Trading Ahead of Customer
Orders) provides that, except as provided in Rule 5320, a member that
accepts and holds an order in an equity security from its own customer
or a customer of another broker-dealer without immediately executing
the order is prohibited from trading that security on the same side of
the market for its own account at a price that would satisfy the
customer order, unless it immediately thereafter executes the customer
order up to the size and at the same or better price at which it traded
for its own account. Among other things, Supplementary Material .05 to
Rule 5320 (Odd Lot and Bona Fide Error Transaction Exceptions) provides
an exception from these obligations for a member's proprietary trade
that is ``to offset a customer order that is in an amount less than a
normal unit of trading[.]'' The proposed rule change would add a new
sentence to Supplementary Material .05 to Rule 5320 to clarify that,
for purposes of Rule 5320, a ``normal unit of trading'' for an NMS
stock means the ``round lot'' assigned to such NMS stock pursuant to
Rule 600(b) of SEC Regulation NMS.
The FINRA Rule 6200 Series (Alternative Display Facility) sets
forth rules governing the operation of the FINRA Alternative Display
Facility (``ADF''), which provides members with a facility for the
display of quotations, the reporting of trades, and the comparison of
trades in NMS stocks. FINRA Rule 6220 (Definitions) defines specified
terms used in the ADF rules, including to define a ``normal unit of
trading'' to mean ``100 shares of a security unless, with respect to a
particular security, the market where the security is listed determines
that a normal unit of trading shall constitute other than 100 shares.''
The proposed rule change would amend the definition of ``normal unit of
trading'' in Rule 6220 to mean the ``round lot'' assigned to a security
pursuant to Rule 600(b) of SEC Regulation NMS.\10\
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\10\ FINRA Rule 6272 (Character of Quotations) includes a
duplicative definition of ``normal unit of trading.'' See Rule
6272(a)(1). For clarity, the proposed rule change would delete the
definition in Rule 6272, as the definitions in Rule 6220 apply to
the entirety of the Rule 6200 Series. Similarly, FINRA 6279
(Alternative Trading Systems) prohibits the provision of a reserved-
size function unless the size of the order displayed through the ADF
is ``100 shares or greater.'' The proposed rule change would amend
Rule 6279 to prohibit a reserved-size function unless the size of
the order displayed through the ADF is a normal unit of trading or
greater.
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The FINRA Rule 6300 Series (Trade Reporting Facilities) sets forth
the rules governing the operation of the FINRA/Nasdaq Trade Reporting
Facilities and the FINRA/NYSE Trade Reporting Facility (collectively,
the ``TRFs''), which provide members with a mechanism for the reporting
of transactions in NMS stocks effected otherwise than on an exchange.
FINRA Rules 6320(A) (Definitions) and 6320(B) (Definitions) define
specified terms used in the FINRA/Nasdaq TRF and FINRA/NYSE TRF rules,
respectively, including ``normal unit of trading,'' which means ``100
shares of a security unless, with respect to a particular security,
FINRA determines that a normal unit of trading shall constitute other
than 100 shares.'' The proposed rule change would amend the definitions
of ``normal unit of trading'' in both Rule 6320(A) and Rule 6320(B) to
mean the ``round lot'' assigned to a security pursuant to Rule 600(b)
of SEC Regulation NMS.
FINRA Rule 7620A (FINRA/Nasdaq Trade Reporting Facility Reporting
Fees) sets forth the charges to be paid by participants for use of the
FINRA/Nasdaq TRFs. Under Rule 7620A, participants must complete
attestations to qualify for the ATS Market Maker Media/Contra Party Cap
and the ATS Market Maker Combined Media Activity Cap. Both attestations
include a statement that the participant will ``display a quotation
size of at least one normal unit of trading (specific for each
security)'' in each symbol traded on an alternative trading system
registered pursuant to Regulation ATS. The proposed rule change would
add a new sentence to Supplementary Material .01 to Rule 7620A, which
sets forth the definitions of specified terms used in the rule, to
clarify that for purposes of Rule 7620A, a ``normal unit of trading''
means the ``round lot'' assigned to a security pursuant to Rule 600(b)
of SEC Regulation NMS.
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 be designed to prevent fraudulent and
manipulative acts and practices, to promote just and equitable
principles of trade, to remove impediments to and perfect the mechanism
of a free and open market and national market system, and, in general,
to protect investors and the public interest, and Section 15A(b)(11) of
the Act,\12\ which requires among other things that FINRA rules include
provisions governing the form and content of quotations relating to
securities sold otherwise than on a national securities exchange which
may be distributed or published by any member or person associated with
a member, and the persons to whom such quotations may be supplied.
FINRA believes the proposed rule change will reduce confusion and
provide greater clarity to members and the public by conforming the
term ``normal unit of trading'' as used in FINRA rules with respect to
NMS stocks to the new definition of ``round lot'' as adopted by the
Commission in Regulation NMS.
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\11\ 15 U.S.C. 78o-3(b)(6).
\12\ 15 U.S.C. 78o-3(b)(11).
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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. The proposed rule change
conforms FINRA rules to requirements established under Regulation NMS.
Economic Impact Assessment
FINRA has undertaken an economic impact assessment, as set forth
below, to analyze the potential economic impacts of the proposed rule
change, including anticipated costs, benefits, and distributional and
competitive effects, relative to current baseline.
Regulatory Need
The proposed rule change would conform FINRA rules with amendments
to the definition of ``round lot'' under Rule 600(b)(93) of Regulation
NMS, minimizing potential confusion and helping industry participants
[[Page 60203]]
implement the SEC's new definition of ``round lot.''
Economic Baseline
The economic baseline for the proposed rule change consists of
current FINRA Rules 5220, 5320, 6220, 6272, 6279, 6320A, 6320B, and
7620A, as well as the amendments to Rule 600 of Regulation NMS adopted
by the SEC.
Economic Impacts
The proposed changes to FINRA rules conform the term ``normal unit
of trading'' as used in FINRA rules with respect to NMS stocks to the
new definition of ``round lot'' as adopted by the SEC in Regulation
NMS. The proposed changes do not impose any burdens on industry beyond
those that industry must incur to implement the SEC's final rules
pertaining to the new definition.
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)(iii) of the Act \13\ and Rule 19b-4(f)(6) thereunder.\14\
Because the proposed rule change does not: (i) significantly affect the
protection of investors or the public interest; (ii) impose any
significant burden on competition; and (iii) become operative prior to
30 days from the date on which it was filed, or such shorter time as
the Commission may designate, if consistent with the protection of
investors and the public interest, the proposed rule change has become
effective pursuant to Section 19(b)(3)(A) of the Act \15\ and Rule 19b-
4(f)(6)(iii) thereunder.\16\
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\13\ 15 U.S.C. 78s(b)(3)(A)(iii).
\14\ 17 CFR 240.19b-4(f)(6).
\15\ 15 U.S.C. 78s(b)(3)(A).
\16\ 17 CFR 240.19b-4(f)(6). In addition, Rule 19b-4(f)(6)
requires a self-regulatory organization 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) \17\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\18\ the Commission
may designate a shorter time if such action is consistent with the
protection of investors and the public interest. FINRA has asked the
Commission to waive the 30-day operative delay so that FINRA can
implement the proposed rule change immediately and conform its rules
with current federal securities laws and regulations, particularly Rule
600(b)(93) of Regulation NMS, which took effect in November 2025.\19\
For these reasons, and because the proposed rule change does not raise
any new or novel regulatory issues, the Commission finds that waiving
the 30-day operative delay is consistent with the protection of
investors and the public interest. Accordingly, the Commission hereby
waives the 30-day operative delay and designates the proposed rule
change as operative upon filing.\20\
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\17\ 17 CFR 240.19b-4(f)(6).
\18\ 17 CFR 240.19b-4(f)(6)(iii).
\19\ See supra note 7.
\20\ For purposes only of waiving the 30-day operative delay,
the Commission has also 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 under
Section 19(b)(2)(B) \21\ of the Act to determine whether the proposed
rule change should be approved or disapproved.
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\21\ 15 U.S.C. 78s(b)(2)(B).
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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#780a0d141d551b1715151d160c0b380b1d1b561f170e"><span class="__cf_email__" data-cfemail="2d5f584148004e4240404843595e6d5e484e034a425b">[email protected]</span></a>. Please include
file number SR-FINRA-2025-015 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-2025-015. 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 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-2025-015 and should be submitted on or
before January 13, 2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\22\
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\22\ 17 CFR 200.30-3(a)(12), (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-23666 Filed 12-22-25; 8:45 am]
BILLING CODE 8011-01-P
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