How is “executing party” defined for purposes of the trade reporting structure?
A204.5: Under FINRA rules, the “executing party” is defined as the member that receives an order for handling or execution or is presented an order against its quote, does not subsequently re-route the order, and executes the transaction. For transactions between two members where both members could reasonably maintain that they satisfy the definition of executing party (e.g., manually negotiated trades via the telephone), the member representing the sell-side must report the transaction to FINRA, unless the parties agree otherwise and the member representing the sell-side contemporaneously documents such agreement. See Rules 6282(b), 6380A(b), 6380B(b), and 6622(b); see also Regulatory Notice 09-08 (January 2009).
