FINRA has expanded its alternative trading system (ATS) transparency initiative. Beginning October 3, FINRA is now publishing monthly information on block-size trades occurring on ATS’s. Among other things, this data may be used by broker-dealers for market regulation surveillance purposes. The information can be found on FINRA’s website and is available free of charge.

Through new technology, FINRA was able to begin publishing volume and trade count information for equity securities executed on ATS’s in June 2014. Then, in April 2016, FINRA began posting the remaining, non-ATS over-the-counter (OTC) equity volume by FINRA member broker-dealer and security. Publishing monthly ATS block-size trading statistics in National Market System (NMS) stocks is FINRA’s latest effort to provide additional transparency to OTC trading in equity securities to assist with broker-dealer compliance.

In a news release published on October 3, Steven A. Joachim, FINRA’s Executive Vice President of Transparency Services, explained that FINRA is taking these measures to provide greater visibility into ATS trading activity, as well as greater transparency of the OTC market, for both market professionals and the investing public. “Greater public understanding of the market helps strengthen investor confidence,” said Joachim.

As for the data being published: the statistics for ATS block-sized trades are being compiled for surveillance across all NMS stocks for a period of one month of trading. After the end of the month for which trading was aggregated, the information will be published for surveillance; publication will occur no earlier than one month after the end of the month during which the data was aggregated.

FINRA is not narrowly defining what counts as a block-size trade. Instead, FINRA is using both share-based and dollar-based thresholds, as well as thresholds that include both shares and dollar amounts, in the following categories:

  • 10,000 or more shares
  • $200,000 or more in value
  • 10,000 or more shares and $200,000 or more in value
  • 2,000 to 9,999 shares
  • $100,000 to $199,999 in value
  • 2,000 to 9,999 shares and $100,000 to $199,999 in value

For each category, for each ATS aggregated across all NMS stocks, FINRA is publishing monthly trade count and volume information. Additionally, FINRA is providing the average trade size and each ATS’s rank. Finally, FINRA is also publishing the “ATS Block Market Share” (the proportion of each ATS’s block-size trading volume in relation to total block-size trading by all ATSs), “ATS Block Business Share” (the proportion of a particular ATS’s overall trading volume that was done as block-size trades), and the rankings of those metric for each category.

This is good information for broker-dealers to have, especially for new broker-dealers. The data is available on two new tabs on FINRA’s existing OTC Transparency Data page: “ATS Blocks” and “ATS Blocks Download”. As previously mentioned, there is a one-month publication delay, so the reports published on October 3 reflect ATS trades made during August.