Oats Exclusion Agreement

9. Question 8 concerns situations in which an order cannot be transferred immediately due to system problems. What happens if human error, for example. B a registered representative who does not follow fixed rules, leads to an order being sent to my designated rapporteur or for the order to be forwarded to a destination other than my designated report member received? Would my company automatically lose its status as an undclared member? FINRA recognizes that systemic problems are often unavoidable and, therefore, isolated cases of delay in order management are not considered an automatic disqualification of a non-member status, provided that certain steps are taken by the member, as indicated in question 8 above, and that there is no persistent delay in routing. Similarly, FINRA recognizes that isolated human error is often unavoidable. Therefore, isolated cases of delayed transmission of commands or isolated instances in which an order is transferred to a target other than the indicated reference member due to human error are treated in the same way as routing delays due to system problems. Companies must follow the procedures described above in question 8 in order to get the same attention for human error as for system problems and to avoid the company being excluded. As with systemic problems, repeated control routing problems due to human error can prevent the company from being excluded. However, in the example above, although it is not eligible for the exclusion of OATS reporting obligations, the entity may establish an OATS relationship with each of these clearing companies, in which clearing companies declare THE OATS data to FINRA on behalf of the company. In particular, Rule 7450 (c) authorizes companies to enter into agreements with reporting agents under which the reporting agent agrees to meet the company`s OATS obligations. In the example above, the company could enter into reporting agent agreements with clearing company A and clearing company B, so that these clearing companies would report OATS information on behalf of the company as part of the MPID (not the MPID of clearing companies).

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