What is the “explicit fee” functionality provided by the FINRA/NASDAQ TRF and ORF?
Pursuant to Rule 7230A(h) and, effective June 1, 2010, Rule 7330(i), members may agree in advance to transfer a transaction fee charged by one member to another member on an OTC transaction reported to the FINRA/NASDAQ TRF or the ORF, respectively. The transaction fee is transferred through the submission of a clearing report, which must provide, in addition to all other information required under the trade reporting rules, a total per share or contract price amount, inclusive of the transaction fee. Thus, members submit two price amounts as part of their report to the FINRA/NASDAQ TRF or ORF: one price including the transaction fee, which is submitted by the FINRA/NASDAQ TRF or ORF to NSCC for clearance and settlement; and one price exclusive of the transaction fee, which is reported for public dissemination.
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