Regulatory Notice 12-36

FINRA and ISG Delay Effective Date for Enhanced Electronic Blue Sheet Submissions

Published Date:

July 18, 2012

The effective date for compliance with certain elements identified in this Notice has been extended to May 1, 2014. See Regulatory Notice 13-38.

Effective Dates: November 30, 2012, and May 1, 2013

Executive Summary

FINRA and the other interested members of the Intermarket Surveillance Group (ISG interested members)¹ have extended the effective dates for firms to submit new data elements for Electronic Blue Sheets (EBS) to correspond with the recent extension by the SEC of the implementation of SEC Large Trader Reporting Rule (SEA Rule 13h-1).²

Effective November 30, 2012, and May 1, 2013, as discussed in more detail below, firms must begin submitting the additional formats of Blue Sheet data specified in Regulatory Notice 11-56 to FINRA and the other ISG interested members. This extension will allow broker-dealers additional time to develop, test and implement the enhancements.

Attachment A to this Notice sets forth additional modifications from Regulatory Notice 11-56 regarding changes to the Blue Sheet record layout and Attachment B outlines the updated Transaction Type Identifiers.

Questions concerning the EBS enhancements should be directed to [email protected].

The effective date for compliance with certain elements identified in this Notice has been extended to May 1, 2013. [] See Regulatory Notice 12-47.

Updated April 30, 2013: The effective date for compliance with certain elements identified in this Notice has been extended to November 1, 2013. See Regulatory Notice 13-16. Effective Dates: November 30, 2012, May 1, 2013 and November 1, 2013.

Discussion

On December 13, 2011, FINRA issued Regulatory Notice 11-56 to announce enhancements to EBS to improve the regulatory agencies' ability to analyze broker-dealers' trading activities. The new requirements specified in the Notice were a combined effort of FINRA and the ISG interested members.

FINRA and the other ISG interested members have extended the compliance dates for the Blue Sheet reporting requirements to November 30, 2012, and May 1, 2013, to allow broker-dealers additional time to develop, test and implement the enhancements.³ By November 30, 2012, broker-dealers must be in Blue Sheet reporting compliance for all seven of the required new fields described in Regulatory Notice 11-56 and reiterated below as such fields may apply to all NMS securities and for all transactions effected directly or indirectly by or through:

• any proprietary account of a U.S. registered broker-dealer; or

• any account used by a customer that trades through a "sponsored access" arrangement.

By May 1, 2013, broker-dealers must be in Blue Sheet reporting compliance for the Order Execution Time, Entering Firm Identifier and Executing Firm Identifier fields described below in all securities (not just NMS securities) and all types of transactions effected directly or indirectly by or through all types of accounts that are Blue Sheet reportable for a traditional (or non-LTID) Blue Sheet request. Broker-dealers may submit values in these three new fields in all securities and all types of transactions for a traditional Blue Sheet request prior to May 1, 2013, and it will be accepted by FINRA and the other ISG interested members.

As previously announced in Regulatory Notice 11-56, broker-dealers must add the following fields to the Blue Sheet record layout. However, the Employer SIC Code field has been withdrawn as a Blue Sheet requirement. In addition, the Entering Firm and Executing Firm fields have been renamed and modified to accept either a Market Participant Identifier (MPID) or a Central Registration Depository (CRD®) number. Consistent with Regulatory Notice 11-56, FINRA reminds broker-dealers that firms may voluntarily submit the Large Trader Identification Number (LTID) and Large Traded Identification Qualifier fields to FINRA or the other ISG interested members. Please see Attachment A for details.

Order Execution Time, Record Sequence Number Five, Field Position 72 to 77

Firms should use this record to submit the order execution time in 24-hour format and in Eastern Time formatted as HHMMSS. This information is not limited to the blue sheet transactions relating to the SEC Large Trader Reporting Rule (SEA Rule 13h-1). Please note that all firms must synchronize their time clocks to the atomic clock to maintain an accurate audit trail in connection to the reported execution time.

Large Trader Identification Number 1, Record Sequence Number Seven, Field Position 2 to 14

Firms should use this record to submit the Large Trader Identification Number. This information is requested under the approved SEC Large Trader Reporting Rule (SEA Rule 13h-1) requirements.

Large Trader Identification Number 2, Record Sequence Number Seven, Field Position 15 to 27

Firms should use this record to submit the Large Trader Identification Number. This information is requested under the approved SEC Large Trader Reporting Rule (SEA Rule 13h-1) requirements.

Large Trader Identification Number 3, Record Sequence Number Seven, Field Position 28 to 40

Firms should use this record to submit the Large Trader Identification Number. This information is requested under the approved SEC Large Trader Reporting Rule (SEA Rule 13h-1) requirements.

Large Trader Identification Qualifier, Record Sequence Number Seven, Field Position 41

Firms should use this record to submit the Large Trader Identification Qualifier. If more than three LTIDs exist for a transaction, then firms should mark the field "Y" for Yes. Otherwise it should be marked "N" for No. This information is requested under the approved SEC Large Trader Reporting Rule (SEA Rule 13h-1) requirements.

Entering Firm Identifier, Record Sequence Number Seven, Field Positions 42 to 49

Firms should use this record to submit the entering firm's Market Participant Identifier or Central Registration Depository number. Please note the new field positions for this data element.

Executing Firm Identifier, Record Sequence Number Seven, Field Positions 50 to 57

Firms should use this record to submit the executing firm's Market Participant Identifier or Central Registration Depository number. Please note the new field positions for this data element.

The following modifications and/or corrections were also made to Attachment A of this Notice:

• The Employer SIC Code field has been withdrawn as a Blue Sheet requirement.

• The Entering Firm MPID field has been renamed as the Entering Firm Identifier field. This field has been modified to accept either the entering firm's MPID or CRD number. The field has been moved to Record Sequence Number Seven, Position 42 through 49.

• The Executing Firm CRD Number field has been renamed the Executing Firm Identifier field. This field has been modified to accept either the executing MPID or CRD number. The field has been moved to Record Sequence Number Seven, Position 50 through 57.

• For all required new fields cited in this Notice, an "R" was added to the Field Format column to indicate that validation is required for these new fields. Please refer to the prior ISG EBS Validation Requirements in Notice to Members 05-58.

• An "R" was also added to the Field Format column for the Derivative Symbol, Expiration Date, Call/Put Indicator, Strike Dollar and Strike Decimal fields as an indication that validation is required for these fields. Please refer to the prior ISG EBS Validation Requirements in Notice to Members 05-58.

• For the Requestor Code and Exchange Code fields, the value "U" was added to represent BOX Options Exchange, LLC.

• For the Exchange Code field, the value "L", which was inadvertently omitted from Regulatory Notice 11-56, has been reinstated to represent the London Stock Exchange.

• For the Requestor Code and Exchange Code fields, the names of the ISG members have been updated, if applicable.

• For the Large Trader Identification Number 1 through 3 and the Large Trader Identification Qualifier fields, the Justify column was modified from Right Justification of Data (RJ) to Left Justification of Data (LJ).

The following modifications and/or corrections were made to Attachment B of this Notice (Additional modifications to Attachment B may be forthcoming in the near future.):

• The value "W" was added to the Options column to represent Voluntary Professional. The value should be used to indicate clients who voluntarily declare themselves a "Voluntary Professional." It is the client's responsibility to identify the trade as such. In addition, an exchange may define what it considers to be a "Voluntary Professional." For example, CBOE Rule 1.1(fff) defines "Voluntary Professional."

• The values "M", "N" and "Y", which represent Market-Maker, Non-Member Market-Maker/Specialist Account and Stock Specialist-Assignment, respectively, were inadvertently mis-categorized under the Equity column in Regulatory Notice 11-56 and have been correctly re-categorized under the Options column.

Broker-dealers are reminded that failure to properly fill out the Blue Sheet fields is a violation of FINRA Rule 8211 and/or FINRA Rule 8213.

Blue Sheet Submission Methodology

Currently, blue sheet requests are made under specific security symbols and option symbology. As noted in Regulatory Notice 11-56 firms will be required to submit blue sheets, when requested, using three additional formats:

1. account number and date;

2. account number, symbol and date; or

3. date range and executing firm.

Compliance with this requirement is similarly extended to November 30, 2012. As outlined in Regulatory Notice 11-56, the request by account number would require firms to identify the account number of a specific account at a firm, e.g. John Doe at CC Clearing Co. The request would cover all transactions under the John Doe account number at CC Clearing Co. To reduce data submission size, a blue sheet request may also ask for a specific symbol and date in connection with the account number. Additionally, blue sheet requests may be made for a specific review period under an executing firm. This request would require a firm to identify a clearing firm client's blue sheets for a set number of days, weeks or months, e.g. Firm ABC for the month of January 2011.

In addition, in response to a request from the SEC for large trader transition records, broker-dealers must be prepared to submit blue sheet data, when requested, by large trader status, including LTID number(s).

Blue Sheet Testing

Starting on November 1, 2012, FINRA will open its customer test website to allow firms to test their enhanced blue sheets data file before submitting it to production. Firms that already have entitlement to FINRA's Regulation Filing Application can proceed with testing their Blue Sheet modifications by submitting their test data to https://regfilingtest.finra.org. To access the customer test website, firms should enter the same user ID and password they use to access the production website. Firms that do not have entitlement to FINRA's Regulation Filing Application should contact (800) 321-6273.

The Securities Industry Automation Corporation (SIAC) will also be open to receiving blue sheet test files by November 1, 2012. Firms can obtain initial testing instructions from SIAC by contacting Michal Skibicki at (212) 383-9073 or [email protected].

Frequently Asked Questions

FINRA provides answers to frequently asked questions (FAQ) on its website. The FAQs will be updated from time to time. Please see FINRA's website for the most recent version. Questions concerning the EBS enhancements should be directed to [email protected].

¹ The interested members include the following exchanges and self-regulatory organizations (SROs) as members of the ISG: BATS Exchange, Inc., BATS Y-Exchange, Inc., Chicago Board Options Exchange, Inc., C2 Options Exchange, Inc., CBOE Stock Exchange, LLC, Chicago Stock Exchange, Inc., EDGA Exchange, Inc., EDGX Exchange, Inc., International Securities Exchange, LLC, The NASDAQ Stock Market LLC, NASDAQ OMX BX, Inc., NASDAQ OMX PHLX LLC, National Stock Exchange, Inc., New York Stock Exchange, LLC, NYSE MKT, LLC, NYSE Area, Inc., and BOX Options Exchange, LLC.

² The Securities and Exchange Commission extended the compliance date for the broker-dealer recordkeeping, reporting and monitoring requirements of Rule 13h-l to November 30, 2012, and May 1, 2013. Please see Securities Exchange Release No. 34-66839 (April 20, 2012), 77 FR 25007 (April 26, 2012) for further details.

³Id.

Attachment A

Record Layout for Submission of Trading Information

Field Position		Field Length	Field Name/Description/Remarks	Field Format	Justify	Picture Clause	Default Value
From	To	Field Length	Field Name/Description/Remarks	Field Format	Justify	Picture Clause	Default Value
			*This record must be the first record of the file*
1	3	3	FILLER	A	LJ	X(3)	HDR
4	5	2	FILLER	A	LJ	X(2)	.S
6	10	5	DTRK-SYSID	N	LJ	9(5)	12343
11	12	2	FILLER	A	LJ	X(2)	.E
13	14	2	FILLER	N	LJ	9(2)	00
15	16	2	FILLER	A	LJ	X(2)	.C
17	20	4	DTRK-ORIGINATOR Please call SIAC for assignment (212) 383-2210	A	LJ	X(4)	—
21	22	2	FILLER	A	LJ	X(2)	.S
23	26	4	DTRK-SUB-ORIGINATOR Please call SIAC for assignment (212) 383-2210	A	LJ	X(4)	—
27	27	1	FILLER	A	LJ	X(1)	B
28	33	6	DTRK-DATE Contains submission date.	N	LJ	9(6)	MMDDYY
34	34	1	FILLER	A	LJ	X(1)	B
35	59	25	DTRK-DESCRIPTION Required to identify this file.	A	LJ	X(25)	FIRM TRADING INFORMATION
60	80	21	FILLER	A	LJ	X(21)	B
1	1	1	HEADER RECORD CODE Value: Low Values OR ZERO	A	—	X	—
2	5	4	SUBMITTING BROKER NUMBER If NSCC member use NSCC clearing number. If not a NSCC member, use clearing number assigned to you by your clearing agency.	A-R	LJ	X(4)	B
6	40	35	FIRM'S REQUEST NUMBER Tracking number used by the firm to record requests from an organization.	A	—	X(35)	B
41	46	6	FILE CREATION DATE Format is YYMMDD	A	—	X(6)	—
47	54	8	FILE CREATION TIME Format is HH:MM:SS	A	—	X(8)	—
55	55	1	REQUESTOR CODE Requesting Organization Identification Values:	A	—	X	—
			A = New York Stock Exchange
			B = NYSE MKT, LLC
			C = Chicago Stock Exchange
			D = NASDAQ OMX
			E = NYSE Arca
			F = NASDAQ OMX BX, Inc.
			G = National Stock Exchange
			H = BATS Exchange, Inc.
			I = International Securities Exchange
			J = Direct Edge (EDGA Exchange and EDGX Exchange)
			K = Chicago Board Options Exchange,C2 Options Exchange and CBSX (CBOE Stock Exchange)
			R = FINRA
			U = BOX Options Exchange, LLC
			X = U.S. Securities and Exchange Commission
			Y = BATS Y-Exchange, Inc.
			Z = Other
56	70	15	REQUESTING ORGANIZATION NUMBER Number assigned by requesting organization	A	LJ	X(15)	B
71	80	10	FILLER	A	—	X(10)	B
1	1	1	RECORD SEQUENCE NUMBER ONE The first record of the transaction. Value: 1	A	—	X	—
2	5	4	SUBMITTING BROKER NUMBER Identical to Submitting Broker Number in Header Record	A-R	LJ	X(4)	—
6	9	4	OPPOSING BROKER NUMBER The NSCC clearing house number of the broker on the other side of the trade.	A-R	LJ	X(4)	B
10	21	12	CUSIP NUMBER The cusip number assigned to the security. Left justified since the number is nine characters at present (8+ check digit) but will expand in the future.	A	LJ	X(12)	B
22	29	8	TICKER SYMBOL The symbol assigned to this security. For options (pre-OSI), the OPRA option symbol (space), OPRA expiration month symbol and OPRA strike price symbol should be used. (Ex. Maytag May 20 call option series would be reported as MYG ED. This example uses six spaces in the field with a space between the OPRA symbol and the OPRA expiration month.) Post OSI this field must contain OPTIONXX and a Record Sequence Number Six must be completed	A-R	LJ	X(8)	B
30	35	6	TRADE DATE The date this trade executed. Format is YYMMDD.	A-R	—	X(6)	B
36	41	6	SETTLEMENT DATE The date this trade will settle. Format is YYMMDD	A	—	X(6)	B
42	53	12	QUANTITY The number of shares or quantity of bonds or option contracts.	N-R	RJ	9(12)	Z
54	67	14	NET AMOUNT The proceeds of sales or cost of purchases after commissions and other charges.	N	RJ	S9(12) V99	Z
68	68	1	BUY/SELL CODE Values: 0 = Buy, 1 = Sale, 2 = Short Sale, 3 = Buy Open, 4 = Sell Open, 5 = Sell Close, 6 = Buy Close. A = Buy Cancel, B = Sell Cancel, C = Short Sale Cancel, D = Buy Open Cancel, E = Sell Open Cancel, F = Sell Close Cancel, G = Buy Close Cancel. Values 3 to 6 and D to G are for options only	A-R	—	X	B
69	78	10	PRICE The transaction price. Format: $$$$ CCCCCC.	N-R	RJ	9(4) V(6)	Z
79	79	1	EXCHANGE CODE Exchange where trade was executed. Values:	A-R	—	X	B
			A = New York Stock Exchange
			B = NYSE MKT, LLC
			C = Chicago Stock Exchange
			D = NASDAQ OMX PHLX
			E = NYSE Arca
			F = NASDAQ OMX BX, Inc.
			G = National Stock Exchange
			H = BATS Exchange, Inc.
			I = International Securities Exchange
			J = C2 Options Exchange
			K = Chicago Board Options Exchange
			L = London Stock Exchange
			M =Toronto Stock Exchange
			N = Montreal Stock Exchange
			O =TSX Venture Exchange
			P = Direct Edge (EDGA Exchange)
			Q=FINRA ADF
			R = NASDAQ OMX/NASDAQ OMX Options Market
			S = Over-the-Counter
			T = Tokyo Stock Exchange
			U = BOX Options Exchange, LLC
			V = Direct Edge (EDGX Exchange)
			W = CBSX (CBOE Stock Exchange)
			X = NASDAQ OMX PSX
			Y = BATS Y-Exchange, Inc.
			Z = Other
80	80	1	BROKER/DEALER CODE Indicate if trade was done for another Broker/Dealer. Values: 0 = No; 1 = Yes	A-R	—	X	B
1	1	1	RECORD SEQUENCE NUMBER TWO Value: 2	A	—	X	—
2	2	1	SOLICITED CODE Values: 0 = No; 1 = Yes	A-R	—	X	B
3	4	2	STATE CODE Standard Postal two character identification.	A-R	—	X(2)	B
5	14	10	ZIP CODE/COUNTRY CODE Zip Code — five or nine character (zip plus four) Country code — for future use.	A-R	LJ	X(10)	B
15	22	8	BRANCH OFFICE/REGISTERED REPRESENTATIVE NUMBER Each treated as a four-character field. Both are left justified.	A-R	LJ	X(8)	B
23	28	6	DATE ACCOUNT OPENED Format is YYMMDD	A-R	—	X(6)	B
29	48	20	SHORT NAME FIELD Contains last name followed by comma (or space) then as much of first name as will fit.	A	LJ	X(20)	B
49	78	30	EMPLOYER NAME	A	LJ	X(30)	B
79	79	1	TIN 1 INDICATOR Values: 1 = SS#; 2 = TIN	A-R	—	X	B
80	80	1	TIN 2 INDICATOR Values: 1 = SS#; 2 = TIN — for future use.	A	—	X	B
1	1	1	RECORD SEQUENCE NUMBER THREE Value: 3	A	—	X	—
2	10	9	TIN ONE Taxpayer Identification Number Social Security or Tax ID Number.	A-R	LJ	X(9)	B
11	19	9	TIN TWO Taxpayer Identification Number #2 Reserved for future use.	A	LJ	X(9)	B
20	20	1	NUMBER OF N&A LINES	A	—	X	B
21	50	30	NAME AND ADDRESS LINE ONE	A-R	LJ	X(30)	B
51	80	30	NAME AND ADDRESS LINE TWO	A-R	LJ	X(30)	B
1	1	1	RECORD SEQUENCE NUMBER FOUR	A	—	X	—
			Value: 4
2	31	30	NAME AND ADDRESS LINE THREE	A-R	LJ	X(30)	B
32	61	30	NAME AND ADDRESS LINE FOUR	A-R	LJ	X(30)	B
62	62	1	TRANSACTION TYPE IDENTIFIERS See Attachment B for current codes.	A-R	—	X	B
63	80	18	ACCOUNT NUMBER Account number	A-R	LJ	X(18)	B
1	1	1	RECORD SEQUENCE NUMBER FIVE Value: 5	A	—	X(1)	—
2	31	30	NAME AND ADDRESS LINE FIVE	A-R	LJ	X(30)	B
32	61	30	NAME AND ADDRESS LINE SIX	A-R	LJ	X(30)	B
62	65	4	PRIME BROKER Clearing number of the account's prime broker.	A-R	LJ	X(4)	B
66	66	1	AVERAGE PRICE ACCOUNT 1= recipient of average price transaction. 2= average price account itself.	N-R	—	9(1)	Z
67	71	5	DEPOSITORY INSTITUTION IDENTIFIER Identifying number assigned to the account by the depository institution.	A-R	LJ	X(5)	B
72	77	6	Order Execution Time HHMMSS — Time format will be in Eastern Time and 24 hour format.	N-R	LJ	—	—
78	80	3	FILLER	A	—	X	B
1	1	1	RECORD SEQUENCE NUMBER SIX Value: 6	A	—	—
2	9	8	DERIVATIVE SYMBOL The symbol assigned to the derivative	A-R	LJ	—	B
10	15	6	EXPIRATION DATE The date the option expires. Format is YYMMDD	A-R	—	—	B
16	16	1	CALL/PUT INDICATOR C = Call, P = Put	A-R	—	—	B
17	24	8	STRIKE DOLLAR The dollar amount of the strike price	N-R	RJ	—	Z
25	30	6	STRIKE DECIMAL The decimal amount of the strike price	N-R	RJ	—	Z
31	80	50	FILLER	A	LJ	—	B
1	1	1	RECORD SEQUENCE NUMBER SEVEN Value: 7	A	—	—
2	14	13	Large Trader Identification 1	A-R	LJ	—	Z
15	27	13	Large Trader Identification 2	A-R	LJ	—	Z
28	40	13	Large Trader Identification 3	A-R	LJ	—	Z
41	41	1	Large Trader Identification Qualifier	A-R	LJ	—	Z
42	49	8	Entering Firm Identifier	A-R	LJ	—	B
50	57	8	Executing Firm Identifier	A-R	LJ	—	B
58	80	23	FILLER	A	LJ	—	B
1	1	1	TRAILER RECORD DATE One record per submission. Must be the last record on the file. Value: High Values or "9"	A	—	X	—
2	17	16	TOTAL TRANSACTIONS The total number of transactions. This total excludes Header and Trailer Records.	N	RJ	9(16)	B
18	33	16	TOTAL RECORDS ON FILE The total number of 80 byte records. This total includes Header and Trailer Records, but not the Datatrak Header Record (i.e., it does not include the first record on the file).	N	RJ	9(16)	Z
34	80	47	FILLER	A	—	X(47)	B

Field Format
A = Alphanumeric (all caps)
N = Numeric
P = Packed
B = Binary
R = Validation Required

Default Values
B = Blanks
Z= Zero

Justify
RJ = Right Justification of Data
LJ = Left Justification of Data

Attachment B

Record Layout for Submission of Trading Information

Transaction Type	Security Type
	Equity*	Options
Non-Program Trading, Agency	A	C
Non-Index Arbitrage, Program Trading, Proprietary	C
Index Arbitrage, Program Trading, Proprietary	D
Index Arbitrage, Program Trading, Individual Investor	J
Non-Index Arbitrage, Program Trading, Individual Investor	K
Non-Program Trading, Proprietary	P	F
Non-Program Trading, Individual Investor	I
Non-Index Arbitrage, Program Trading, Agency	Y
Index Arbitrage, Program Trading, Agency	U
Index Arbitrage, Program Trading, as Agent for Other Member	M
Non-Index Arbitrage, Program Trading, as Agent for Other Member	N
Non-Program Trading, as Agent for Other Member	W
Specialist	S	S
Market-Maker		M
Non-Member Market-Maker/Specialist Account		N
Stock Specialist — Assignment		Y
Short Exempt, Agency	B
Customer Range Account of a Broker/Dealer		B
Registered Trader	G
Error Trade	Q
Competing Market Maker Proprietary Transaction: Affiliated w/ Clearing Member	O
Competing Market Maker: Unaffiliated Member's Competing Market Maker	T
Competing Market Maker: Non-Member	R
Short Exempt Transaction: Proprietary Account of Clearing Member Organization or Affiliated Member/Member Organization	E
Short Exempt Transaction: Proprietary Account of Unaffiliated Member/Member Organization	F
Short Exempt Transaction: Individual Customer Account	H
Short Exempt Transaction: Competing Market Maker this is a Member/Member Organization Trading for own account	L
Short Exempt Transaction: One Member Acting as Agent for Another Member's Competing Market Maker Account	X
Short Exempt Transaction: Account of Non Member Competing Market Maker	Z
Amex Option Specialist/Market Maker Trading Paired Security	V
Registered Trader Market Maker Transaction Regardless of the Clearing Number		P
Transactions cleared for a NASDAQ market maker that is affiliated w/ the clearing member that resulted from telephone access to the specialist. Amex Only.	3
Transactions cleared for a member's NASDAQ market maker that is not affiliated with the clearing member that resulted from telephone access to the specialist. Amex Only.	4
Transactions cleared for a non-member NASDAQ market maker that is not affiliated with the clearing member that resulted from telephone access to the specialist. Amex Only.	5
Voluntary Professional		W

* Equity securities include those securities that trade like equities (e.g., ETFs and structured products).