FINRA Amends Regulation NMS

Regulation NMS

The Financial Industry Regulatory Authority  has adopted amendments to its rules related to the operation of the Regulation NMS Plan to Address Extraordinary Volatility following a trading pause or regulatory halt.  FINRA Rule 6121.01 (Resumption of Trading in Securities Subject to the Regulation NMS Plan to Address Extraordinary Market Volatility) provides, among other things, that no trades in an NMS stock are permitted to occur during a trading pause. The rule also addresses the resumption of trading otherwise than on an exchange in an NMS stock following a trading pause. The amendment to Rule 6121.01 is part of an effort by FINRA and other self-regulatory organizations to clarify the operation of the LULD Plan during the short period of time following the resumption of trading after a trading pause or regulatory halt and before the price bands are received from the processor for securities that are subject to the LULD Plan.

The amendments clarify that, following a trading pause or regulatory halt, a member firm may resume off-exchange trading in an NMS security if trading has commenced on the primary listing exchange (or on another exchange following a 10-minute pause) and either the member firm has received the price bands from the processor; or the member firm has calculated an upper price band and lower price band consistent with the FINRA rules, and the FINRA member firm verifies that the transaction is within the ranges provided for in FINRA rules.

The FINRA amendments become effective August 22, 2016. FINRA Notice 16-26 is available here.

For further information about this securities law blog  post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956, by email at [email protected] or visit This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship.  Please note that the prior results discussed herein do not guarantee similar outcomes.

Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
Facsimile: (561) 416-2855