When your firm trades away from an exchange, the market learns about that trade only from the report your firm files. A late, mislabeled or missing report distorts public prices, and the firm answers for it.
An exchange prints its own trades. A trade executed over-the-counter (OTC), meaning anywhere other than an exchange, becomes public only when a member reports it to the Financial Industry Regulatory Authority (FINRA). FINRA runs separate trade reporting facilities because different securities trade in different markets. The security type tells you where the report goes:
- NMS stocks: A national market system (NMS) stock is, in practice, an exchange-listed equity.
- OTC equity securities: Equities that are not NMS stocks go to the OTC Reporting Facility (ORF).
- TRACE-eligible securities: Dollar-denominated corporate, agency, Treasury and similar debt goes to the Trade Reporting and Compliance Engine (TRACE).
KEY: Who files also differs. On the equity facilities, the executing party files one report for a trade between two members, and the member reports a trade with a non-member or customer.
Common mistakes
- Using one minute for TRACE. The limit is 15 minutes for most bonds, 60 for Treasuries.
- Treating 10 seconds as a safe harbor. Deliberate delay violates Rule 6380A.02 even inside the limit.
- Double-reporting equity trades. Equity: executing party only; TRACE: both sides.
Bottom line
- NMS stocks report to a TRF or the ADF, other OTC equities to the ORF, and TRACE-eligible debt to TRACE.
- Equity trades are reported as soon as practicable and no later than 10 seconds; Rule 144A restricted equity trades the same business day.
- Most TRACE trades are reported as soon as practicable and no later than 15 minutes (effective June 8, 2026), Treasuries within 60 minutes; the one-minute limit never took effect.
- For equities the executing party reports between members; on TRACE both members report.
Exam shortcut
When a stem names a security, sort it first: listed stock, non-listed stock or bond. That one step gives you the facility, the deadline and who reports. Then scan the answers for the familiar traps: "one minute" for TRACE, "both parties" for an equity trade, or "30 seconds" for a TRF. For an exception, choose document, investigate and escalate patterns over a simple resubmission.
The full lesson (about 4,951 words, 33 min read) adds 2 worked examples, all 6 common mistakes, a self-check, free in the app.
Learning objectives
- D15
Browse all free Series 24 lessons or jump into free Series 24 practice questions.