Trade Report Input
FINRA Rule 7230B — Trade Report Input is the operative rule governing how, when, and with what data a member must submit a trade report to the FINRA/NYSE Trade Reporting Facility. Where Rule 7210B supplies the vocabulary and Rule 7220B establishes who may participate, Rule 7230B is the rule that actually describes the mechanics of trade reporting itself: what counts as a reportable transaction, the timing window for submission, the specific data elements required, and the separate procedures governing cancellations, reversals, and other non-standard reports. It is the longest and most operationally dense rule in the Rule 7200B Series, and it forms the foundation that Rule 7260B's audit trail obligations later build upon.
Overview and Regulatory Text
Rule 7230B opens by establishing which transactions are reportable, requiring members to comply with the Rule 7200B Series when reporting transactions in Reportable Securities, including executions of less than one round lot when those executions are to be compared and locked in. All reportable transactions are processed pursuant to an effective transaction reporting plan, and trades that are not already locked in through some other mechanism must be compared and locked in through the System itself. The rule then addresses timing: Participants must transmit trade reports to the System as soon as practicable but no later than ten seconds after execution, or within such other time period as may be prescribed by rule, consistent with the timing standard found throughout FINRA's trade reporting facility rules. FINRA has periodically revisited this timing standard through targeted rulemaking, including limited exceptions for specified overnight transactions reported before regular market hours, reflecting the reality that a rigid ten-second window does not fit every trading scenario equally well.
The rule's data element requirements, found in subsection (d), enumerate the specific information a Reporting Party must submit for every transaction, including a symbol indicating whether the submitting party represents the Reporting Member as the Executing Party, denoted EPID, or the Non-Reporting Party as the Contra Party, denoted CPID, along with capacity indicators distinguishing principal, riskless principal, and agency trades, and identification of the reporting side's clearing broker and any give-up arrangement. These data elements are the same elements Rule 7260B later converts into an ongoing accuracy and completeness obligation, making Rule 7230B and Rule 7260B functionally paired provisions even though they are separated by two intervening rules in the series, a pairing candidates should keep in mind when studying either rule in isolation.
Aggregation Rules and Their Divergence from the Rule 7200A Series
One of the more significant substantive differences between Rule 7230B and its Rule 7230A counterpart lies in how each treats aggregation of individual executions. Rule 7230A permits limited aggregation of individual executions in a security at the same price and with the identical contra party into a single report, submitted for clearing purposes only, provided a Reporting Party does not withhold reporting a trade in anticipation of such aggregation. Rule 7230B takes a stricter position: individual executions of orders in a security at the same price may not be aggregated for System reporting purposes at all, full stop. This is a genuine substantive divergence, not merely a difference in phrasing, and firms accustomed to the FINRA/Nasdaq Trade Reporting Facility's more permissive aggregation treatment cannot assume the same practice is available when reporting through the FINRA/NYSE Trade Reporting Facility.
This prohibition reflects the different market structure and trading patterns historically associated with the securities reported through each facility. Firms building automated trade reporting logic that spans both facilities need to configure aggregation handling separately for each, since applying Rule 7230A's aggregation allowance to trades destined for the FINRA/NYSE Trade Reporting Facility would itself constitute a Rule 7230B violation, independent of whether the underlying trade data was otherwise accurate. This is precisely the kind of cross-facility configuration error that a well-designed compliance testing regime should be built to catch before it ever reaches production.
Restrictions on Non-Tape Reports Tied to Unreported Trades
Rule 7230B imposes a specific restriction on non-tape reports, meaning reports not intended for public tape dissemination, that are associated with a previously executed trade. Members are prohibited from submitting a non-tape report, whether a non-tape non-clearing report or a clearing-only report, including but not limited to reports of step-outs and reversals, tied to a previously executed trade that was never itself reported to the System. The rule carves out a narrow exception for reports submitted to reflect the offsetting riskless portion of a riskless principal transaction under Rule 6380B(d). Where this exception applies, the non-tape report must identify the facility or market where the associated trade was actually reported, in a form FINRA specifies.
This restriction exists to prevent a specific kind of audit trail gap: a member using non-tape or clearing-only reports to reallocate positions, whether through step-outs, step-ins, or reversals, without any underlying record in the System of the original transaction those reports purport to reference. Because step-out and reversal functionality was historically developed as an operational convenience for firms managing clearing relationships, rather than as a substantive reporting requirement in its own right, FINRA built this restriction to ensure the convenience could not be used to create trade activity in the System's records untethered from an actual reported transaction. Firms relying heavily on step-out arrangements with correspondent or clearing partners should treat this restriction as a standing control point in their own internal reconciliation processes, confirming that every non-tape report submitted under this exception traces back to a genuine, previously reported original trade before the report is transmitted.
Reporting Cancelled and Reversed Trades
Rule 7230B requires members to report the cancellation or reversal of any trade previously submitted to the System, with a narrow exception for trades cancelled directly by FINRA staff under the Rule 11890 Series. The obligation to report a cancellation or reversal falls specifically on the member responsible under FINRA rules for submitting the original trade report, meaning this is not a duty any party to the transaction can discharge; it follows the original Reporting Party designation. Members must comply with the deadlines and other requirements set forth in Rule 6380B governing cancelled and reversed trades, which distinguishes a same-day cancellation from a reversal occurring on a later date, each carrying its own timing and identification requirements.
This distinction between cancellation and reversal is not merely terminological. A cancellation, reported on the same day as the original execution, and a reversal, reported on a subsequent day, can carry different downstream consequences for market data accuracy and for how FINRA's surveillance systems reconcile a security's reported trading activity. FINRA's more recent amendments in this area have moved toward requiring reversal reports to identify the original trade report by its System-generated control number and report date, improving FINRA's ability to link a reversal back to the specific transaction it cancels rather than relying on members to make that connection informally.
This shift toward explicit linkage reflects a broader pattern across FINRA's trade reporting rules, where FINRA has progressively tightened requirements that once depended on informal or inferential connections between related reports. Before these amendments, a firm reversing a trade several days after execution could submit a reversal report without directly referencing the original transaction, requiring FINRA's surveillance systems to reconstruct that connection through other means, such as matching on security, size, and approximate timing. Requiring the control number directly in the reversal report removes that reconstruction burden and reduces the risk that a reversal is either mismatched to the wrong original trade or left effectively orphaned in FINRA's records.
Transaction Fee Facilitation and Recordkeeping
Rule 7230B also addresses a specific commercial arrangement between members that agree to transfer a transaction fee through the FINRA/NYSE Trade Reporting Facility. When two members have agreed in advance to facilitate the transfer of a fee charged by one member to another on a reported transaction, the trade report must include pricing information reflecting a total per-share or per-contract price inclusive of that fee, submitted for clearing purposes, separate from the price reported for public dissemination purposes. Before any such report can be submitted, both members and their respective clearing firms, where applicable, must have executed an agreement, in the form FINRA specifies, permitting the fee transfer through the facility, along with any other applicable agreement such as a give-up agreement under Rule 6380B(g).
These agreements are treated as member records for purposes of Rule 4511, meaning both members must make and preserve them in conformity with FINRA's general recordkeeping requirements rather than treating them as informal side arrangements outside the scope of the firm's books and records obligations. Rule 7230B is explicit that nothing in this provision relieves a member of its separate obligations under other FINRA rules and federal securities laws, expressly citing Rule 2232, governing customer confirmations, and SEA Rule 10b-10, the Commission's own confirmation disclosure rule. This cross-reference matters because it forecloses any argument that facilitating a transaction fee transfer through the Trade Reporting Facility somehow substitutes for, or diminishes, a member's independent confirmation and disclosure obligations owed directly to its customers, obligations that exist regardless of how the underlying trade happened to be reported.
Regulatory History and Rulebook Placement
Rule 7230B traces its lineage to SR-NASD-2007-011, effective April 18, 2007, adopted alongside the rest of the original Rule 7200B Series governing the newly established FINRA/NYSE Trade Reporting Facility. It has been amended multiple times since, including through SR-FINRA-2008-021, effective December 15, 2008, during the broader rulebook consolidation described in Regulatory Notice 08-57, and through subsequent amendments addressing reversal identification requirements and other refinements to the cancellation and reversal framework as FINRA's surveillance capabilities evolved. The rule's cross-reference to Rule 6380B for cancellation and reversal deadlines reflects FINRA's broader practice of housing detailed timing requirements within the Rule 6000 Series transaction reporting rules while keeping the Rule 7200 Series focused on facility-specific input mechanics.
The rule sits between Rule 7220B, Trade Reporting Participation Requirements, and Rule 7240B, Trade Report Processing, occupying the operational center of the Rule 7200B Series. Every subsequent rule in the series that references trade report content, including Rule 7250B's obligation to honor trades and Rule 7260B's audit trail accuracy standard, depends on the data elements and submission mechanics Rule 7230B establishes.
Examination Relevance Across the FINRA Exam Suite
Series 24 candidates should focus particularly on the aggregation divergence between Rule 7230A and Rule 7230B, since a General Securities Principal supervising trade reporting across firms or desks using multiple FINRA facilities must ensure supervisory procedures correctly distinguish which aggregation rules apply to which facility. Series 24 candidates should also understand the cancellation and reversal reporting framework, including which member bears responsibility for the correction report and the distinct deadlines applicable to same-day cancellations versus later reversals. A well-prepared Series 24 candidate should additionally be able to explain why the transaction fee facilitation provisions in subsection (i) create recordkeeping obligations distinct from the trade reporting obligations found elsewhere in the rule, since supervisory principals are often tested on their ability to separate genuinely distinct compliance workstreams that superficially resemble one another.
SIE candidates need only the conceptual layer: trade reports must be submitted promptly, must contain specific data elements, and corrections to previously reported trades follow their own distinct rules. Series 7 candidates have limited direct exposure to the mechanics of Rule 7230B, since trade report input is typically an operations function rather than a representative-level task, though understanding that every executed trade generates a corresponding reporting obligation provides useful context. Series 63 and Series 65 candidates will not encounter Rule 7230B on either exam, as both are oriented toward state securities law and investment adviser regulation rather than FINRA facility-level trade reporting mechanics.
Professional and Industry Relevance for Working Practitioners
For operations teams building or maintaining trade reporting infrastructure, Rule 7230B's aggregation prohibition is one of the more consequential technical requirements to get right, precisely because it is easy to overlook if a firm's reporting logic was originally built around the more permissive Rule 7230A standard and later extended to cover the FINRA/NYSE Trade Reporting Facility without adjustment. Firms should treat aggregation handling as a facility-specific configuration point requiring explicit verification, rather than assuming logic validated against one facility's rules will transfer safely to the other.
For compliance officers reviewing cancellation and reversal activity, Rule 7230B's requirement that the original Reporting Party bear responsibility for correction reports provides a clear starting point for any investigation into an unreported or improperly corrected trade. A pattern of cancellations or reversals originating from a party other than the original Reporting Party, or reversal reports lacking proper identification of the original trade, are useful red flags suggesting a firm's internal processes for handling trade corrections may not be tracking the rule's requirements accurately.
Firms facilitating transaction fee transfers through the FINRA/NYSE Trade Reporting Facility should treat the recordkeeping requirements attached to those arrangements as a distinct compliance workstream from ordinary trade reporting. Because the underlying fee facilitation agreements qualify as member records under Rule 4511, they are subject to the same retention and production obligations that apply to a firm's other regulatory records, and a firm that treats these agreements as informal commercial paperwork rather than formal books and records risks a finding entirely separate from any deficiency in the trade reports themselves. Periodic audits of active fee facilitation agreements, confirming that each remains properly executed and that both counterparties' obligations under Rule 2232 and SEA Rule 10b-10 are being independently satisfied, help ensure this narrower but genuine compliance exposure does not go unmonitored.
Examination Relevance and Key Takeaways
Rule 7230B establishes the substantive mechanics of trade reporting to the FINRA/NYSE Trade Reporting Facility, covering reportable transactions, the ten-second timing standard, the specific data elements required under subsection (d), and the distinct procedures governing non-tape reports, cancellations, and reversals. Its most significant divergence from the parallel Rule 7230A provision is the flat prohibition on aggregating individual executions at the same price, a stricter standard than the FINRA/Nasdaq Trade Reporting Facility permits, and firms operating across both facilities need to configure their reporting logic accordingly rather than assuming shared treatment. The rule's cancellation and reversal framework assigns clear responsibility to the original Reporting Party and increasingly emphasizes explicit identification of the original trade being corrected, while its transaction fee facilitation provisions layer a separate books and records obligation onto any member relying on that mechanism.
Series 24 candidates and operations supervisors carry the greatest practical stake in mastering this rule's mechanics, particularly the aggregation divergence and the cancellation and reversal responsibility framework, while SIE candidates need only the conceptual grasp of prompt, accurate, and correctable trade reporting. Series 7 candidates retain limited but useful context regarding how their executed trades generate downstream reporting obligations, and Series 63 and Series 65 candidates can treat this rule as entirely outside their tested scope. For working operations and compliance professionals, verifying that automated reporting systems correctly distinguish facility-specific rules, rather than applying a single unified logic across every FINRA trade reporting facility, remains one of the more reliable ways to avoid Rule 7230B deficiencies before they surface in examination.
