Enhancements to the REX System and Updates to Data and Other Requirements Applicable to Requests for Extensions of Time Under Regulation T and SEA Rule 15c3-3
As a result of current events related to the COVID-19 pandemic and the associated impact on firms’ available resources to implement technology changes, FINRA is delaying the March 30, 2020, effective date for firms to begin submitting the last four digits of a customer’s Social Security or tax identification number and the update for certain validation identifiers and validation criteria to meet Regulation T calls. The new effective date will be May 31, 2020, and the testing cycle will continue to be available until May 15, 2020.
Effective Date:
December 3, 2018 (enhancements to the REX System to provide firms the ability to submit Securities Exchange Act (SEA) Rule 15c3-3(d)(4) extension of time requests via a batch file process and other updates to the extension of time request forms)
February 25, 2019 (updates to data and validation requirements for extension of time requests under Regulation T and SEA Rule 15c3-3)
Summary
Effective on December 3, 2018, FINRA will update the Regulatory Extension (REX) system1 to improve the process for requesting extensions of time required under SEA Rule 15c3-3 and FINRA Rule 4210. Specifically, the changes will provide firms the ability to submit SEA Rule 15c3-3(d)(4) extension of time requests via a batch file process and add functionality to enhance the process by which firms request extensions of time under FINRA Rule 4230(a), SEA Rule 15c3-3(d), (m) and (h), and file the reports required under FINRA Rule 4230(b). Further, effective on February 25, 2019, firms will no longer be required to submit a customer's complete Social Security or tax identification number, and shall instead submit the last four digits of such numbers when requesting extensions of time under Rule 4230(a). In addition, FINRA is updating certain validation identifiers and validation criteria that will affect the extension timeframes available to meet Regulation T calls. These updates are further detailed in Appendix A of this Notice.
Questions concerning this Notice may be directed to:
Background & Discussion
REX System Update
FINRA is updating the REX system to provide firms the ability to submit SEA Rule 15c3-3(d) (4) extension of time requests via a batch file process. Currently, SEA Rule 15c3-3(d)(4) extension of time requests are submitted via the online request form in the REX system. Beginning December 3, 2018, firms will have the option to submit SEA Rule 15c3-3(d)(4) requests via a batch file process using the same REX batch XML file format that is used for Regulation T and SEA Rule 15c3-3(d), (m), and (h) related extension of time requests. To file SEA Rule 15c3-3 (d)(4) extension of time requests via the batch file process, firms must update the data fields in their batch XML file layout. Information about the batch filing process and the required changes is available at FINRA's REX technical page.
Also effective on December 3, 2018, FINRA will modify the online forms used to submit extension of time requests and the reports required under FINRA Rule 4230. Certain data fields within the REX system have been modified, affecting how firms must submit requests for extensions of time related to Regulation T calls and SEA Rule 15c3-3 (d), (m) and (h) requirements. See the FINRA's REX technical page for further details regarding these changes.
Beginning February 25, 2019, the following additional changes to the REX system will take effect:
Firms may consult the REX technical page for further information about these changes.
Testing: REX Customer Test Environment (CTE) — October 15, 2018
To assist firms in preparing for the changes specified in this Notice, FINRA has created a REX CTE that firms may use to test their submission of extension of time requests and the reports required by FINRA Rule 4230(b). Firms may submit extension of time requests required by Regulation T and SEA Rule 15c3-3 via both the FINRA CTE Gateway online request form and the batch file process.
FINRA will begin accepting test files through the REX batch file CTE on October 15, 2018. During the testing period, firms will have the ability to request reports of all extension requests submitted. The reports will be available the business day after the request is submitted. FINRA encourages firms to begin testing as soon as possible to ensure their readiness to file extension of time requests when the changes to the REX system are implemented on December 3, 2018, and February 25, 2019. Connectivity testing to the CTE for submissions of extension of time requests via the REX batch process will be available at https://filetransfer.ct.finra.org/ beginning October 8, 2018.
To log into the FINRA CTE, firms must use their current FINRA Gateway user ID and password. Firms that encounter technical problems, or require a FINRA user ID and password, may contact the FINRA Help Desk at (800) 321-6273. Additional information about the test phase is included in Appendix B of this Notice. Firms may also consult the REX technical page.
1. FINRA introduced the REX system in August 2010 and has implemented periodic updates as appropriate. These enhancements will not affect FINRA Rule 4210 extension of time requests noted in Regulatory Notice 18-07. See, e.g., Regulatory Notice 10-28 (June 2010) (Extension of Time Requests), Regulatory Notice 14-13 (March 2014) (REX System Update), Regulatory Notice 17-12 (Regulatory Extension (REX) System Update), and Regulatory Notice 18-07 (Extensions of Time Requests Relating to FINRA Rule 4210).
Appendix A
| Extension Type |
Current
Validation Identifier |
Current REX Message
|
New
Validation Identifier Beginning February 25, 2019 |
Updated REX Denial Message –
Beginning February 25, 2019 |
| Reg T | BR3530 | For Reg T extension requests on New Issue Securities filed under code 008, the request shall be made between S+6 business days and S+34 calendar days |
BR3530 | For Reg T extension requests under code 008, 1. If the settlement date is less than
or equal to T+3 business days, the request shall be made on T+4 business day, or 2. If the settlement date is greater
than or equal to T+4 business days, the request shall be made on the earlier of one business day after the date on which settlement is required to occur by the rules of the foreign securities market or T+35 calendar days. |
| Reg T | BR3630 | For Reg T requests other than New Issue Securities filed under code 008, the request shall be made between T+6 business days and T+34 calendar days |
BR3630 | |
| Reg T | BR3520 | For Reg T extensions requests on New Issue Securities filed under code 015, the request shall be made between S+4 business days and S+35 calendar days |
BR3520 | For Reg T extension requests on New Issue Securities under codes 012, 014, or 015, the request shall be made promptly after the securities have been made available and no later than T+35 calendar days. |
| Reg T | BR3540 | For Reg T extensions requests on New Issue Securities filed under code 015, the request shall be made between S+4 business days and S+35 calendar days |
||
| Reg T | BR3620 | For Reg T requests other than New Issue Securities filed under codes 012 or 014, the request shall be made between T+4 business days and T+34 calendar days |
BR3620 | For Reg T extension requests other than New Issue Securities under codes 012, 014, or 015, the request shall be made no later than T+35 calendar days. |
| Reg T | BR3615 | For Reg T extension requests other than New Issue Securities filed under code 015, the request shall be made between T+4 business days and T+35 calendar days |
Appendix B
| REX System Testing and Implementation Timeline | |
| Week | Action |
| October 8, 2018 | Batch connectivity testing will be available at https://filetransfer.ct.finra.org/ |
| October 15 – November 23, 2018 |
Testing cycle begins for the reporting requirement under FINRA Rule 4230 and for both online and batch filers for Regulation T and SEA Rule 15c3-3 extension of time requests. During this testing cycle, firms must submit the complete Social Security number or tax ID for Reg T and SEA Rule 15c3-3 extension of time requests. During this testing timeframe, the “current validation identifiers” listed in Appendix A will be in effect. |
| November 29 – 30, 2018 | Blackout period, extensions of time under Reg T and SEA Rule 15c3-3 will not be accepted. |
| December 3, 2018 | Implementation date of online form enhancements and the ability to file SEA Rule 15c3-3(d)(4) extension of time requests via the batch process. Firms must submit the complete Social Security number or tax ID for Reg T and SEA Rule 15c3-3 extension of time requests until February 25, 2019. |
| December 3, 2018 – February 18, 2019 |
Testing Cycle continues for both online and batch filers for Regulation T and SEA Rule 15c3-3extension of time requests. During this testing cycle, firms must submit the last four digits of a customer's Social Security number or tax ID for Reg T and SEA Rule 15c3-3 extension of time requests. During this testing timeframe, the new validation identifiers listed in Appendix A will be in effect. |
| February 18, 2019 | End of testing cycle for Regulation T and SEA Rule 15c3-3 extension of time requests. |
| February 18, 2019 | Implementation date. Firms must submit the last four digits of a customer's Social Security or tax ID number for Regulation T and SEA Rule 15c3-3 extension requests. |