Notice2025-24048
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rule 6830 (Industry Member Data Reporting) Regarding the Bona Fide Market Making Exception Under SEC Regulation SHO
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 31, 2025
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 90 Issue 247 (Wednesday, December 31, 2025)</title>
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[Federal Register Volume 90, Number 247 (Wednesday, December 31, 2025)]
[Notices]
[Pages 61488-61490]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2025-24048]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-104502; File No. SR-FINRA-2025-016]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend FINRA Rule 6830 (Industry Member Data
Reporting) Regarding the Bona Fide Market Making Exception Under SEC
Regulation SHO
December 23, 2025.
Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934
(``Act'' or ``Exchange Act''),\1\ and Rule 19b-4 thereunder,\2\ notice
is hereby given that on December 12, 2025, the Financial Industry
Regulatory Authority, Inc. (``FINRA'') filed with the Securities and
Exchange Commission (``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 6830 (Industry Member Data
Reporting) 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 amendment to the CAT NMS Plan that requires broker-dealers
with a
[[Page 61489]]
reporting obligation to CAT to report whether an original receipt or
origination of an order to sell an equity security is a short sale for
which a market maker is claiming the bona fide market making exception
in Rule 203(b)(2)(iii) of Regulation SHO (``BFMM Locate
Exception'').\4\
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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 Release No. 98738 (October 13,
2023), 88 FR 75100 (November 1, 2023); Securities Exchange Act
Release No. 98739 (October 13, 2023), 88 FR 75079 (November 1,
2023).
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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
The purpose of this proposed rule change is to amend FINRA Rule
6830 of the CAT Compliance Rule to be consistent with the amendment to
the CAT NMS Plan related to the BFMM Locate Exception. In 2023, the
Commission amended the CAT NMS Plan to require the reporting to the CAT
of reliance on the BFMM Locate Exception.\5\ Specifically, the
Commission added paragraph (D) to Section 6.4(d)(ii) of the CAT NMS
Plan, which requires each Participant, through its Compliance Rule, to
require its Industry Members to record and report to the Central
Repository the following:
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\5\ See supra note 5.
for the original receipt or origination of an order to sell an
equity security, whether the order is for a short sale effected by a
market maker in connection with bona fide market making activities
in the security for which the exception in Rule 203(b)(2)(iii) of
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Regulation SHO is claimed.
Accordingly, FINRA proposes to amend its CAT Compliance Rule to
reflect this additional CAT reporting requirement. Specifically, FINRA
proposes to add subparagraph (G) to FINRA Rule 6830(a)(2), which would
require each Industry Member to record and report to the Central
Repository the following:
for the original receipt or origination of an order to sell an
equity security, whether the order is for a short sale effected by a
market maker in connection with bona fide market making activities
in the security for which the exception in Rule 203(b)(2)(iii) of
SEC Regulation SHO is claimed.
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,\6\ 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, and, in general, to protect investors and the
public interest, and Section 15A(b)(9) of the Act,\7\ which requires
that FINRA rules not impose any burden on competition that is not
necessary or appropriate.
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\6\ 15 U.S.C. 78o-3(b)(6).
\7\ 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 amendment to the CAT NMS Plan
approved by the Commission 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.'' \8\ To the extent that
this proposed rule change implements the Plan as amended, 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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\8\ 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 amendment to the CAT NMS Plan approved by the
Commission 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 equity securities. In addition, all national securities
exchanges and FINRA are proposing these amendments to their CAT
Compliance Rules. Therefore, this is not a competitive rule filing,
and, therefore, it 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
Because the foregoing 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 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)(iii) of the Act \9\ and
subparagraph (f)(6) of Rule 19b-4 thereunder.\10\
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\9\ 15 U.S.C. 78s(b)(3)(A)(iii).
\10\ 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 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.
The Commission is waiving this requirement.
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A proposed rule change filed under Rule 19b-4(f)(6) \11\ normally
does not become operative prior to 30 days after the date of the
filing. However, pursuant to Rule 19b-4(f)(6)(iii),\12\ the Commission
may designate a shorter time if such action is consistent with
protection of investors and the public interest. The Exchange has asked
the Commission to waive the 30-day operative delay so that the proposed
[[Page 61490]]
rule change may become operative immediately upon filing. The
Commission believes that waiving 30-day operative delay is consistent
with the protection of investors and the public interest because the
proposal seeks to amend the Exchange's CAT Compliance Rule to reflect
the requirement in the CAT NMS Plan that industry members report for
the original receipt or origination of an order to sell an equity
security, whether the order is for a short sale effected by a market
maker in connection with bona fide market making activities in the
security for which the exception in Rule 203(b)(2)(iii) of Regulation
SHO is claimed.\13\ The proposal does not introduce any novel
regulatory issues. Accordingly, the Commission designates the proposed
rule change to be operative upon filing.\14\
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\11\ 17 CFR 240.19b-4(f)(6).
\12\ 17 CFR 240.19b-4(f)(6)(iii).
\13\ See supra note 4.
\14\ 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 shall institute proceedings to
determine whether the proposed rule 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="http://www.sec.gov/rules/sro.shtml">http://www.sec.gov/rules/sro.shtml</a>); or
<bullet> Send an email to <a href="/cdn-cgi/l/email-protection#4032352c256d232f2d2d252e3433003325236e272f36"><span class="__cf_email__" data-cfemail="6f1d1a030a420c0002020a011b1c2f1c0a0c41080019">[email protected]</span></a>. Please include
file number SR-FINRA-2025-016 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-2025-016. 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="http://www.sec.gov/rules/sro.shtml">http://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-2025-016 and should be submitted on or before January 21,
2026.
For the Commission, by the Division of Trading and Markets,
pursuant to delegated authority.\15\
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\15\ 17 CFR 200.30-3(a)(12) and (59).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2025-24048 Filed 12-30-25; 8:45 am]
BILLING CODE 8011-01-P
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