2232. Customer Confirmations
(a) A member shall, at or before the completion of any transaction in any security effected for or with an account of a customer, give or send to such customer written notification ("confirmation") in conformity with the requirements of SEA Rule 10b-10.
(b) A confirmation given or sent pursuant to this Rule shall further disclose:
(1) with respect to any transaction in any NMS stock, as defined in Rule 600 of SEC Regulation NMS, or any security subject to the reporting requirements of the FINRA Rule 6600 Series, other than direct participation programs as defined in FINRA Rule 6420, the settlement date of the transaction; and
(2) with respect to any transaction in a callable equity security, that:
(A) the security is a callable equity security; and
(B) a customer may contact the member for more information concerning the security.
(c) A confirmation shall include the member's mark-up or mark-down for the transaction, to be calculated in compliance with Rule 2121, expressed as a total dollar amount and as a percentage of the prevailing market price if:
(1) the member is effecting a transaction in a principal capacity in a corporate or agency debt security with a non-institutional customer, and
(2) the member purchased (sold) the security in one or more offsetting transactions in an aggregate trading size meeting or exceeding the size of such sale to (purchase from) the non-institutional customer on the same trading day as the non-institutional customer transaction. If any such transaction occurs with an affiliate of the member and is not an arms-length transaction, the member is required to "look through" to the time and terms of the affiliate's transaction with a third party in the security in determining whether the conditions of this paragraph have been met.
(d) A member shall not be required to include the disclosure specified in paragraph (c) above if:
(1) the non-institutional customer transaction was executed by a principal trading desk that is functionally separate from the principal trading desk within the same member that executed the member purchase (in the case of a sale to a customer) or member sale (in the case of a purchase from a customer) of the security, and the member had in place policies and procedures reasonably designed to ensure that the functionally separate principal trading desk through which the member purchase or member sale was executed had no knowledge of the customer transaction; or
(2) the member acquired the security in a fixed-price offering and sold the security to non-institutional customers at the fixed price offering price on the day the securities were acquired.
(e) For all transactions in corporate or agency debt securities with non-institutional customers, the member shall also provide on the confirmation: (1) a reference, and hyperlink if the confirmation is electronic, to a web page hosted by FINRA that contains Trade Reporting And Compliance Engine (TRACE) publicly available trading data for the specific security that was traded, in a format specified by FINRA, along with a brief description of the type of information available on that page; and (2) the execution time of the customer transaction, expressed to the second.
(f) Definitions
For purposes of this Rule, the term:
(1) "agency debt security" shall have the same meaning as in Rule 6710(l);
(2) "corporate debt security" shall have the same meaning as in Rule 6710(jj);
(3) "arms-length transaction" shall mean a transaction that was conducted through a competitive process in which non-affiliate firms could also participate, and where the affiliate relationship did not influence the price paid or proceeds received by the member; and
(4) "non-institutional customer" shall mean a customer with an account that is not an institutional account, as defined in Rule 4512(c).
| Amended by SR-FINRA-2019-008. Amended by SR-FINRA-2016-032 eff. May 14, 2018. Amended by SR-FINRA-2010-066 eff. June 17, 2011. Adopted by SR-FINRA-2009-058 eff. June 17, 2011. Selected Notices: 10-62, 17-08, 17-24. |
- Regulatory Notice 17-24July 12, 2017
- Regulatory Notice 17-08February 15, 2017
- Regulatory Notice 15-36October 12, 2015
- Regulatory Notice 14-52November 17, 2014
- Regulatory Notice 10-62December 15, 2010