Notice2026-06351
Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rule 6272 (Character of Quotations) To Modify the Operation of the Alternative Display Facility in Light of SEC Regulation NMS's New Requirements Related to the Dissemination of Odd-Lot Quotation Information
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
April 2, 2026
Issuing agencies
Securities and Exchange Commission
Full Text
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<title>Federal Register, Volume 91 Issue 63 (Thursday, April 2, 2026)</title>
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[Federal Register Volume 91, Number 63 (Thursday, April 2, 2026)]
[Notices]
[Pages 16788-16791]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2026-06351]
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SECURITIES AND EXCHANGE COMMISSION
[Release No. 34-105109; File No. SR-FINRA-2026-006]
Self-Regulatory Organizations; Financial Industry Regulatory
Authority, Inc.; Notice of Filing and Immediate Effectiveness of a
Proposed Rule Change To Amend FINRA Rule 6272 (Character of Quotations)
To Modify the Operation of the Alternative Display Facility in Light of
SEC Regulation NMS's New Requirements Related to the Dissemination of
Odd-Lot Quotation Information
March 30, 2026.
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 March 27, 2026, the 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. FINRA has designated
the proposed rule change as constituting a ``non-controversial'' rule
change under paragraph (f)(6) of Rule 19b-4 under the Act,\3\ which
renders the proposal effective upon receipt of this filing by the
Commission. 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\ 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 Rule 6272 (Character of Quotations) to
modify the operation of the Alternative Display Facility (``ADF'') in
light of SEC Regulation NMS's new requirements related to the
dissemination of odd-lot quotation information.
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
[[Page 16789]]
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 ADF is a FINRA-operated quotation collection and trade
reporting facility that provides an ADF Market Participant (i.e., a
FINRA member that is an ADF-registered market maker or electronic
communications network) \4\ the ability to display quotations, compare
trades, and report transactions in NMS stocks \5\ for submission to the
exclusive securities information processors (``SIPs'') for
consolidation and dissemination to vendors and other market
participants. As a display-only facility, the ADF does not provide
automated order routing functionality or execution facilities.
Currently, there are no active quoting ADF Market Participants and one
active trade-reporting-only ADF participant.
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\4\ See Rule 6220(a)(3).
\5\ See 17 CFR 242.600(b)(65). For purposes of the ADF rules, an
``ADF-eligible security'' is defined as an NMS stock. See Rule
6220(a)(2).
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The FINRA Rule 6200 Series establishes the requirements for use and
operation of the ADF. FINRA Rule 6272 (Character of Quotations) sets
forth various requirements applicable to ADF Market Participants with
respect to the display of quotations on the ADF. The ADF's quotation
display functionality is limited to quotations with a size of at least
one normal unit of trading (sometimes referred to as a ``round
lot''),\6\ and accordingly, the requirements set forth in FINRA Rule
6272 refer to quotations for at least one normal unit of trading. FINRA
does not currently collect information from ADF Market Participants
regarding quotations with a size less than one normal unit of trading
(sometimes referred to as an ``odd-lot'').
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\6\ For purposes of the ADF rules, a ``normal unit of trading''
is defined to mean the ``round lot'' assigned to a security pursuant
to Rule 600(b) of SEC Regulation NMS. See Rule 6220(a)(9).
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In 2020, the Commission adopted amendments to Regulation NMS to
modernize the information provided within the national market system
for NMS stocks.\7\ Among other things, the MDI Rule amended Rule 600(b)
of Regulation NMS to add a new definition of ``odd-lot information'' to
be disseminated as part of consolidated equity market data. On
September 18, 2024, the Commission adopted further amendments to
Regulation NMS that, among other things, revised and accelerated the
implementation of the new ``odd-lot information'' definition and
associated dissemination through the SIPs.\8\
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\7\ See Market Data Infrastructure, Securities Exchange Act
Release No. 90610 (December 9, 2020), 86 FR 18596 (April 9, 2021)
(File No. S7-03-20) (the ``Market Data Infrastructure Rule'' or
``MDI Rule'').
\8\ 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'').
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In the 2024 NMS Amendments, the SEC adopted amendments to Rules
600(b)(69) and 603(b)(3) of Regulation NMS. Rule 600(b)(69) of
Regulation NMS defines ``odd-lot information.'' \9\ Rule
600(b)(69)(iii) of Regulation NMS includes the highest priced odd-lot
order to buy that is priced higher than the national best bid, and the
lowest priced odd-lot order to sell that is priced lower than the
national best offer (i.e., the ``BOLO'').\10\ Rule 603(b)(3) of
Regulation NMS, among other things, requires the national securities
exchanges and national securities associations to make available to the
exclusive SIPs all data necessary to generate odd-lot information, and
requires the exclusive SIPs to collect, consolidate, and disseminate
odd-lot information. Rule 600(b)(69)(iii) of Regulation NMS will become
effective the first business day of May 2026 (i.e., May 1, 2026).\11\
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\9\ Rule 600(b)(69)(i) of Regulation NMS's definition of ``odd
lot information'' includes, among other things, odd-lot last sale
data, which is already included in SIP consolidated data. Separate
from its functionality with respect to the dissemination of
quotation information, the ADF already supports the reporting and
dissemination of odd-lot last sale data for transmission to the
SIPs. See Rule 6282; see also Securities Exchange Act Release No.
56669 (October 17, 2007), 72 FR 60398 (October 24, 2007) (SR-FINRA-
2007-017) (Notice of Filing and Immediate Effectiveness of Proposed
Rule Change to Amend Rules Relating to Reporting of Odd-Lot
Transactions to FINRA).
\10\ Separately, Rule 600(b)(69)(ii) of Regulation NMS includes
``odd-lots at a price greater than or equal to the national best bid
and less than or equal to the national best offer, aggregated at
each price level at each national securities exchange and national
securities association.'' The SEC has granted temporary exemptive
relief from compliance with Rule 600(b)(69)(ii) of Regulation NMS--
which effectively requires the dissemination of depth-of-book
(``DOB'') odd-lot quotation data for each national securities
exchange and national securities association (each a ``SIP Plan
Participant'') for odd-lot quotations priced at or better than the
national best bid and offer (``NBBO'')--until the first business day
of May 2028 (i.e., May 2, 2028). See Securities Exchange Act Release
No. 104612 (January 15, 2026), 91 FR 2577 (January 21, 2026) (Order
Granting Temporary Exemptive Relief, Pursuant to Section 36(a)(1) of
the Securities Exchange Act of 1934 from Compliance with Rule
600(b)(69)(ii) of Regulation NMS). However, FINRA understands that
the SIPs plan to begin disseminating the best odd-lot bid and offer
priced at or better than the NBBO from each SIP Plan Participant--
effectively the top-of-book (``TOB'') odd-lot quotation data from
each SIP Plan Participant--at the same time as the SIPs begin
disseminating the BOLO. FINRA is therefore proposing in the instant
filing to collect odd-lot information required for the SIPs to
disseminate both the BOLO and the TOB odd-lot quotations for the
ADF. FINRA will consider whether further amendments to the ADF rules
may be appropriate in connection with the future implementation of
DOB odd-lot quotation data under Rule 600(b)(69)(ii).
\11\ See 2024 NMS Amendments, supra note 8, at 81681. FINRA
understands that the SIPs intend to implement the collection and
dissemination of odd-lot information under Rule 600(b)(69)(iii)
(i.e., the BOLO), as well as the TOB odd-lot quotation data for each
SIP Plan Participant, on April 27, 2026, so that the implementation
date occurs on a Monday. See, e.g., Consolidated Tape Plan,
Regulation NMS Mandated Odd Lot Requirement Changes--SEC Grants
Temporary Exemption, Updates to Specs and FAQ Documents (February 3,
2026), available at <a href="https://www.ctaplan.com/announcements#110000954100">https://www.ctaplan.com/announcements#110000954100</a>.
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As noted above, FINRA does not currently collect any odd-lot
quotation information from ADF Market Participants. FINRA is therefore
proposing an amendment to FINRA Rule 6272 requiring ADF Market
Participants to provide specified odd-lot quotation information to
FINRA so that FINRA can provide to the exclusive SIPs the data
necessary to generate the odd-lot information required by Rule
600(b)(69)(iii) of Regulation NMS (i.e., the BOLO), as well as the data
necessary to generate the TOB odd-lot quotation data.\12\ Specifically,
new paragraph (e) of FINRA Rule 6272 would require that, for ADF-
eligible securities, an ADF Market Participant shall provide to FINRA
its highest priced order to buy in an amount less than a normal unit of
trading that is priced at or higher than the national best bid and its
lowest priced order to sell in an amount less than a normal unit of
trading that is priced at or lower than the national best offer.\13\
FINRA will collect and disseminate this data directly to the exclusive
SIPs to permit them to generate the required odd-lot information.
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\12\ The proposed rule change would require an ADF Market
Participant to provide its best odd-lot quotations priced ``at or
higher'' than the national best bid and ``at or lower'' than the
national best offer so that FINRA can provide the information
required for the SIPs to disseminate BOLO and TOB odd-lot quotation
data. Currently, the ADF's quotation display functionality is
limited to round lot quotations.
\13\ See Rule 600(b)(69)(iii) of Regulation NMS.
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FINRA has filed the proposed rule change for immediate
effectiveness. The operative date will be April 27, 2026.\14\
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\14\ The proposed rule change will become operative on April 27,
2026 to align with the industry-wide implementation of the new odd-
lot quotation information requirements. See supra note 11.
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[[Page 16790]]
2. Statutory Basis
FINRA believes that the proposed rule change is consistent with the
provisions of Section 15A(b)(6) of the Act,\15\ 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. The proposed rule change
is also consistent with Section 15A(b)(11) of the Act,\16\ 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.
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\15\ 15 U.S.C. 78o-3(b)(6).
\16\ 15 U.S.C. 78o-3(b)(11).
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The proposed rule change would modify FINRA's rules governing the
operation of the ADF in light of SEC amendments under Regulation NMS
with respect to the collection, consolidation, and dissemination of
odd-lot information. Specifically, the proposed rule change would
require ADF Market Participants to provide specified odd-lot quotation
information to FINRA so that FINRA can provide the information required
for the SIPs to disseminate consolidated odd-lot information. Thus,
FINRA believes the proposed rule change is consistent with the SEC's
goals with respect to the dissemination of odd-lot information,
including providing investors with access to better-priced quotations
and allowing the market to trade in a more informed, competitive, and
efficient manner.\17\ Further, FINRA believes that the proposed rule
change facilitates the increased availability of quotation data to
market participants, thereby enhancing price transparency and price
discovery--supporting market participants' ability to identify and
access better execution opportunities through more complete market
information.
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\17\ See MDI Rule, supra note 7, at 18601.
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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
modifies FINRA rules in light of the SEC's amendments 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 the current baseline.
Regulatory Need
The proposed rule change would modify FINRA rules regarding the
operation of the ADF in light of the SEC's amendments to Regulation NMS
to add the new definition of ``odd-lot information'' under Rule
600(b)(69) of Regulation NMS and require dissemination of odd-lot
information under Rule 603(b)(3) of Regulation NMS.\18\
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\18\ See supra notes 8, 9, and 10.
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Economic Baseline
The economic baseline consists of current FINRA Rule 6272, which
establishes requirements for ADF Market Participants. FINRA does not
currently collect information from ADF Market Participants regarding
their odd-lot quotations. The ADF's quotation display functionality is
limited to quotations of at least one normal unit of trading. As of
early 2026, there are no active quoting ADF Market Participants.
Economic Impacts
The proposed rule change would require ADF Market Participants to
provide specified odd-lot quotation information to FINRA so that FINRA
can provide the information required for the SIPs to disseminate both
the BOLO and the TOB odd-lot quotation data for the ADF.\19\ Because
there are currently no active quoting ADF Market Participants, the
proposed rule change would not have an immediate economic impact;
however, the proposed rule change would update FINRA's rules in light
of amendments to Regulation NMS with respect to the collection,
consolidation, and dissemination of odd-lot information if the ADF has
active quoting Market Participants in the future.
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\19\ See supra note 10.
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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) of the Act \20\ and Rule 19b-
4(f)(6) thereunder.\21\
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\20\ 15 U.S.C. 78s(b)(3)(A).
\21\ 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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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="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#cbb9bea7aee6a8a4a6a6aea5bfb88bb8aea8e5aca4bd"><span class="__cf_email__" data-cfemail="384a4d545d155b5755555d564c4b784b5d5b165f574e">[email protected]</span></a>. Please include
file number SR-FINRA-2026-006 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-2026-006. 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 (https://www.sec.gov/
[[Page 16791]]
rules/sro.shtml). 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-2026-006 and should be submitted on or
before April 23, 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).
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Sherry R. Haywood,
Assistant Secretary.
[FR Doc. 2026-06351 Filed 4-1-26; 8:45 am]
BILLING CODE 8011-01-P
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