Direct Edge Exchange Registration-OATS Impacts

Direct Edge received approval from the Securities Exchange Commission to operate two stock exchanges, EDGA Exchange Inc. and EDGX Exchange Inc. Direct Edge plans its transition from ECN to Exchange to take place on a security-by-security phase-in approach over a period of weeks commencing July 2, 2010. This phase-in schedule is subject to change.

FINRA recognizes a phase-in approach raises programming challenges with respect to members' OATS reporting obligations. FINRA therefore will not require a phase-in approach with respect to OATS reporting.

During the transition period, firms may continue to identify orders routed to Direct Edge (EDGA and EDGX) as orders routed to an ECN with a Destination Code of "E" on OATS Route and Combined Order/Route Reports, until the last security has been transitioned. Firms may also choose to follow the transition schedule and report routes of transitioned securities according to the following:

• For orders routed to EDGA Exchange – new Destination Code of "XJ"
• For orders routed to EDGX Exchange – new Destination Code of "XK"

Once the last security is transitioned, all orders routed to the EDGA Exchange must be coded with a Destination Code of "XJ" and all orders routed to the EDGX Exchange must be coded with a Destination Code of "XK."

Please note: firms may not use the Destination Code of "XJ" to reflect a route of a non-transitioned security to the EDGA Exchange (or "XK" for a route of a non-transitioned security to the EDGX Exchange). Route Reports reflecting orders in non-transitioned securities routed to EDGA ECN and EDGX ECN must continue to have the Destination Code of "E". In other words, until the last security is transitioned, firms may report orders in transitioned securities with the Destination Code of "E", but may not report non-transitioned securities with a code of "XJ" or "XK."

FINRA staff reminds firms that non-transitioned securities routed to EDGA ECN or EDGX ECN remain subject to the OATS matching requirements and firms must continue to provide a Routed Order ID to EDGA ECN or EDGX ECN until the security is transitioned.

Please contact the OATS Helpdesk at 1-800-321-6273 with questions regarding this notice or on OATS in general.