; Marketplace Rules (4000–7000)
o 4000. The Trade Reporting Facility
; 4100. General
Members may use the Trade Reporting Facility to report transactions executed otherwise than on an exchange in all Nasdaq Global Market and Nasdaq Capital Market securities and convertible bonds listed on Nasdaq (―designated securities‖). Members that use the Trade Reporting Facility must comply with the 4000 and 6100 Series, as well
as all other applicable rules.
4110. Use of Trade Reporting Facility on a Test Basis
NASD may at any time authorize the use of the Trade Reporting Facility on a test basis for whatever studies it considers necessary and appropriate.
4200. Definitions
(a) For purposes of the Rule 4000 Series, unless the context requires otherwise:
(1) ―Act‖ means the Securities Exchange Act of 1934.
(2) ―Designated securities‖ means all Nasdaq National
Market and Nasdaq Capital Market securities and
convertible bonds listed on Nasdaq.
(3) ―Member‖ means a broker or dealer admitted to
NASD membership.
(4) ―Market Maker‖ means an ―exchange market
maker‖ or ―OTC market maker,‖ as those terms are defined
in Rule 11Ac1-1 of the Act, that is registered in a particular
designated security as such with an exchange or a
registered securities association or a facility thereof. A
member is considered a Market Maker only in those
designated securities for which it is registered as such.
(5) ―Nasdaq‖ means the NASDAQ Stock Market, LLC.
and its facilities.
(6) ―Nasdaq Global Market‖ or ―NGM‖ is a distinct tier
of Nasdaq comprised of securities that meet the
requirements of and are authorized as a Nasdaq National
Market security. The Nasdaq Global Market is the successor to the Nasdaq National Market.
(7) ―Nasdaq Global Market security‖ or ―NGM security‖ means any authorized security in the Nasdaq Global Market.
(8) ―The Nasdaq Capital Market‖ is a distinct tier of Nasdaq comprised of securities that meet the requirements of and are authorized as a Nasdaq Capital Market security.
(9) ―Nasdaq Capital Market security‖ means any authorized security in The Nasdaq Capital Market.
(10) "Normal business hours" means 9:30 a.m.
Eastern Time to 4:00 p.m. Eastern Time.
(11) “Normal unit of trading‖ means 100 shares of a
security unless, with respect to a particular security, NASD determines that a normal unit of trading shall constitute other than 100 shares.
(12) ―Otherwise than on an exchange‖ means a trade effected by an NASD member otherwise than on or through the facilities of a national securities exchange. The determination of what constitutes a trade ―on or through‖ a particular national securities exchange shall be determined by that exchange in accordance with all applicable statutes, rules and regulations, and with any necessary SEC approval.
(13) “Round lot holder‖ means a holder of a normal
unit of trading.
(14) ―Stop Stock Price‖ means the specified price at which a member and another party agree a Stop Stock Transaction shall be executed, and which price is based upon the prices at which the security is trading at the time the order is received by the member, taking into consideration that the specified price may deviate from the current market prices to factor in the size of the order and the number of shares available at those prices.
(15) ―Stop Stock Transaction‖ means any transaction that meets both of the following conditions:
(A) The transaction is the result of an order
in which a member and another party agree that
the order will be executed at a Stop Stock Price
or better; and
(B) The order is executed at the Stop Stock
Price or better.
(16) ―Trade Reporting Facility Participant‖ or
―Participant‖ means any member in good standing that uses
the Trade Reporting Facility.
4400. Trading of Certain Dually Listed Securities
The NASDAQ Stock Market LLC (the "Nasdaq Exchange") permits issuers whose securities are listed on the New York Stock Exchange to apply also to list those securities on the Nasdaq Global Market ("NGM"). Nasdaq makes an independent determination of whether such issuers satisfy all applicable listing requirements and requires issuers to enter into a dual listing agreement with the Nasdaq Exchange.
NASDAQ does not exercise its authority under Nasdaq Exchange Rule 4390 separately to designate or register such dually listed securities as NASDAQ national market system securities within the meaning of Section 11A of the Securities Exchange Act of 1934 or the rules thereunder. As a result, these securities, which are already designated as national market system securities under the Consolidated Quotation Service ("CQS") and Consolidated Tape Association national market system plans ("CQ and CTA Plans"), remain subject to those plans and shall not become subject to the Nasdaq UTP Plan, the national market system plan governing securities designated by the Nasdaq Stock Market. For purposes of the national market system, such securities shall continue to trade under their current one, two, or three-character ticker symbol. While such securities continue to trade through facilities of the NASD, NASD shall continue to send all quotations and transaction reports in such securities to the processor for the CTA Plan. In addition, dually listed issues that are currently eligible for trading via the Intermarket Trading System ("ITS") shall remain so and continue to trade on the Nasdaq Intermarket trading platform as they do today.
Dually listed securities shall be treated as CQS securities under all NASD rules. Treating dually listed securities as CQS securities under NASD rules is consistent with their continuing status as CQS securities under the CTA, CQ, and ITS national market system, as described
above. This interpretation also preserves the status quo and avoids creating potential confusion for investors and market participants that currently trade these securities on the ITS/CAES System.
For example, NASD shall continue to honor the trade halt authority of the primary market under the CQ and CT Plans. NASD Rule
6431 governing CQS securities shall apply to dually listed securities. SEC Rule 10a-1 governing short sales of CQS securities shall continue to apply to dually listed securities, rather than NASD Rule 5100
governing short sales of Nasdaq listed securities. Market makers in dually listed securities shall retain all obligations imposed by the NASD Rule 5200, 6300, and 6400 Series regarding quoting, trading, and
transaction reporting of CQS securities. The fees applicable to CQS securities set forth in NASD Rule 7010 shall continue to apply to dually
listed issues.
; 4616. Reports
A Trade Reporting Facility Participant shall make such reports to NASD as may be prescribed from time to time by NASD.
; 4618. Clearance and Settlement
(a) A Trade Reporting Facility Participant shall clear and settle transactions in designated securities through the facilities of a registered clearing agency that uses a continuous net settlement system. This requirement may be satisfied by direct participation, use of direct clearing services, or by entry into a correspondent clearing arrangement with another member that clears trades through such an agency.
(b) Notwithstanding paragraph (a), transactions in designated securities may be settled ―ex-clearing‖ provided that both parties to the transaction agree.
; 4621. Suspension and Termination by NASD Action
NASD may, pursuant to the procedures set forth in the Rule 9000
Series, suspend, condition, limit, prohibit or terminate a Trade Reporting Facility Participant‘s ability to use Trade Reporting Facility services in one or more designated securities for violations of applicable
requirements or prohibitions.
; 4622. Termination of Trade Reporting Facility Service
NASD may, upon notice, terminate Trade Reporting Facility service in the event that a Trade Reporting Facility Participant fails to qualify under specified standards of eligibility or fails to pay promptly for services rendered.
; 4630. Reporting Transactions in Designated
Securities
This Rule 4630 Series applies to the reporting by members of transactions in designated securities to the Trade Reporting Facility.
; 4631. Definitions
Terms used in this Rule 4630 Series shall have the meaning as defined in NASD‘s By-Laws and Rules, SEC Rule 11Aa2-1 and the Joint Self-Regulatory Organization Plan Governing the Collection, Consolidation, and Dissemination of Quotation and Transaction Information for Nasdaq-Listed Securities Traded on Exchanges on an Unlisted Trading Privilege Basis, unless otherwise defined herein. Adopted by SR-NASD-2005-087 eff. Aug. 1, 2006.
; 4632. Transaction Reporting
This version is valid from Aug 1 2006 through Nov 30 2006.
(a) When and How Transactions are Reported
(1) Trade Reporting Facility Participants shall, within
90 seconds after execution, transmit to the Trade Reporting
Facility or if the Trade Reporting Facility is unavailable due
to system or transmission failure, by telephone to the
Operations Department, last sale reports of transactions in
designated securities executed during normal market hours.
Transactions not reported within 90 seconds after execution
shall be designated as late.
(2) Transaction Reporting to the Trade Reporting
Facility Outside Normal Market Hours
(A) Last sale reports of transactions in
designated securities executed between 8:00
a.m. and 9:30 a.m. Eastern Time shall be
reported within 90 seconds after execution and
shall be designated as ―.T‖ trades to denote their
execution outside normal market hours.
Transactions not reported within 90 seconds also
shall be designated as .T trades. Transactions
not reported before 9:30 a.m. shall be reported
after 4:00 p.m. and before 6:30 p.m. as .T trades.
(B) Last sale reports of transactions in
designated securities executed between the
hours of 4:00 p.m. and 6:30 p.m. Eastern Time
shall be reported within 90 seconds after
execution and be designated as ―.T‖ trades to
denote their execution outside normal market
hours. Transactions not reported within 90
seconds also shall be designated as .T trades.
Transactions not reported before 6:30 p.m. shall
be reported on an ―as/of‖ basis the following day
between 8:00 a.m. and 6:30 p.m.
(C) Last sale reports of transactions
executed between midnight and 8:00 a.m.
Eastern Time shall be reported between 8:00
a.m. and 9:30 a.m. Eastern Time on trade date
as ―.T‖ trades. Transactions not reported before
9:30 a.m. shall be reported after 4:00 p.m. and
before 6:30 p.m. as .T trades.
(D) Last sale reports of transactions
executed between 6:30 p.m. and midnight
Eastern Time shall be reported on the next
business day (T+1) between 8:00 a.m. and 6:30
p.m. Eastern Time and be designated ―as/of‖
trades.
(3) All members shall report as soon as practicable to the Market Regulation Department on Form T, last sale reports of transactions in designated securities for which electronic submission to the Trade Reporting Facility is not possible (e.g., the ticker symbol for the security is no longer available or a market participant identifier is no longer active). Transactions that can be reported to the Trade Reporting Facility, whether on trade date or on a subsequent date on an ―as of‖ basis (T+N), shall not be reported on Form T.
(4) All members shall append the ".W" trade report modifier to transaction reports occurring at prices based on average-weighting, or other special pricing formulae.
(5) All trade tickets for transactions in designated securities shall be time-stamped at the time of execution.
(6) Transactions not reported within 90 seconds after execution shall be designated as late. A pattern or practice of late reporting without exceptional circumstances may be considered conduct inconsistent with high standards of commercial honor and just and equitable principles of trade in violation of Rule 2110.
(7) All members shall append the .PRP trade report modifier to transaction reports that reflect a price different from the current market when the execution price is based on a prior reference point in time. The transaction report shall include the prior reference time in lieu of the actual time the trade was executed. The .PRP modifier shall not be appended to a report of a transaction whose price is based on a prior reference point in time if the trade is executed and reported within 90 seconds from the prior reference point in time.
(8) The Trade Reporting Facility will append the .T modifier or the .SLD modifier, as appropriate, to those reports submitted to the Trade Reporting Facility that contain the time of execution, but that do not contain the appropriate modifier.
(9) Members shall append the .W trade report modifier to reports of Stop Stock Transactions (as such term is defined in Rule 4200) and include the time at which the
member and the other party agreed to the Stop Stock Price in lieu of including the time of execution on the trade report. The .W modifier shall not be appended to a report of a Stop Stock Transaction if the Stop Stock Transaction is executed and reported within 90 seconds of the time the member and the other party agree to the Stop Price.
(10) To identify pre-opening and after-hours trades reported late, the Trade Reporting Facility will convert the .T modifier to .ST for any report submitted to the Trade Reporting Facility more than 90 seconds after execution.
(b) Which Party Reports the Transaction
(1) In transactions between two Market Makers, the member representing the sell side shall report the trade.
(2) In transactions between a Market Maker and a Non-Market Maker, the Market Maker shall report the trade.
(3) In transactions between two Non-Market Makers, the member representing the sell side shall report the trade.
(4) In transactions between a member and a
non-member or customer, the member shall report the trade.
(5) In transactions conducted through a Reporting ECN (as defined in Rule 6110) that are reported to the Trade
Reporting Facility, the Reporting ECN shall ensure that transactions are reported in accordance with Rule 6130(c).
(c) Information To Be Reported
Each last sale report shall contain the following information:
(1) Stock symbol of the designated security;
(2) Number of shares or bonds;
(3) Price of the transaction as required by paragraph (d) below;
(4) A symbol indicating whether the transaction is a buy, sell, sell short, sell short exempt or cross;
(5) The time of execution expressed in hours, minutes and seconds based on Eastern Time in military format, unless another provision of NASD rules requires that a different time be included in the report; and
(6) For any transaction in an order for which a member has recording and reporting obligations under Rules 6954
and 6955, the trade report must include an order identifier, meeting such parameters as may be prescribed by NASD, assigned to the order that uniquely identifies the order for the date it was received (see Rule 6954(b)(1)).
(d) Procedures for Reporting Price and Volume
Members that report transactions to the Trade Reporting Facility, pursuant to paragraph (b) above shall transmit last sale reports for all purchases and sales in designated securities in the following manner:
(1) For agency transactions, report the number of shares and the price excluding the commission charged.
Example:
SELL as agent 100 shares at 40 less a
commission of $12.50;
REPORT 100 shares at 40.
(2) For dual agency transactions, report the number of shares only once, and report the price excluding the commission charged.
Example:
SELL as agent 100 shares at 40 less a
commission of $12.50;
BUY as agent 100 shares at 40 plus a
commission of $12.50;
REPORT 100 shares at 40.
(3)(A) For principal transactions, except as
provided below, report each purchase and sale
transaction separately and report the number of
shares or bonds and the price. For principal
transactions that are executed at a price that
includes a mark-up, mark-down or service
charge, the price reported shall exclude the
mark-up, mark-down or service charge. Such
reported price shall be reasonably related to the
prevailing market, taking into consideration all
relevant circumstances including, but not limited
to, market conditions with respect to the security,
the number of shares or bonds involved in the
transaction, the published bids and offers with
size at the time of the execution (including the reporting firm's own quotation), the cost of execution and the expenses involved in clearing the transaction.
Example:
BUY as principal 100 shares from
another member at 40 (no
mark-down included);
REPORT 100 shares at 40.
Example:
BUY as principal 100 shares from a
customer at 39.90 which includes a
$0.10 mark-down from prevailing
market at 40;
REPORT 100 shares at 40.
Example:
SELL as principal 100 shares to a
customer at 40.10, which includes a
$0.10 mark-up from the prevailing
market of 40;
REPORT 100 shares at 40.
Example:
BUY as principal 10,000 shares from
a customer at 39.75, which includes a
$0.25 mark-down or service charge
from the prevailing market of 40;
REPORT 10,000 shares at 40.
(B) Exception: A ―riskless‖ principal transaction in which a member after having received an order to buy a security, purchases the security as principal at the same price to satisfy the order to buy or, after having received