Charges for Alternative Display Facility Services and Equipment
FINRA Rule 7500 is the series marker for the fee schedule governing use of the Alternative Display Facility. The core fee rule, now numbered Rule 7510, traces back to NASD Rule 7010A, which governed charges for what was then called the Trade Reporting and Comparison Service, or TRACS, the ADF's original service branding at its 2002 launch.
As part of the Consolidated FINRA Rulebook initiative, NASD Rule 7010A was renumbered as FINRA Rule 7510 by SR-FINRA-2008-021, effective December 15, 2008. Rule 7520, governing connectivity and testing charges for trade-reporting-only participants, was a later, distinct addition: FINRA adopted this requirement by SR-FINRA-2016-031, filed for immediate effectiveness and published as Securities Exchange Act Release No. 78609, 81 FR 57964, on August 18, 2016, with the new requirements taking effect September 12, 2016, per Regulatory Notice 16-33.
Because the ADF, unlike the two Trade Reporting Facilities, is operated directly by FINRA rather than by an exchange affiliate under a Business Member arrangement, the fees set out in this series are established and filed by FINRA itself rather than by an external Business Member's independent pricing authority.
The series consists of Rule 7510, System Services; Rule 7520, connectivity and testing-related charges for firms using the ADF for trade reporting purposes only; and Rule 7530, Other Services, a three-rule structure considerably shorter than the eight-part participation and processing templates found in the substantive facility rule series.
System Services
Rule 7510 is the core fee schedule for ADF participation. Under paragraph (a), Transaction Related Charges apply to trade reporting and comparison activity: a comparison charge of $0.014 per side per 100 shares, subject to a minimum charge calculated on 400 shares and a maximum calculated on 7,500 shares; a $0.029 per trade charge for an Automated Give-Up, charged to the Executing Party, where the associated publicly disseminated trade is not itself reported to the media through the ADF; an identical $0.029 per trade charge for a Qualified Special Representative arrangement under the same condition; a $0.30 per trade Late Report charge for T+N reporting, charged to the Executing Party; and a Corrective Transaction Charge of $0.25 assessed for a break, decline, or reversal of a trade.
Following a 2014 amendment, this category was expanded to include a separate $0.25 charge assessed on each party that cancels or corrects a trade, distinct from the break/decline/reversal charge, intended to defray FINRA's administrative costs in processing cancel and correct requests rather than to generate net revenue.
Rule 7510 also establishes quotation update charges, assessed based on the average daily number of publicly disseminated trades an ADF participant reports to the media through the facility during the applicable billing period. Separately, paragraph (c) establishes a flat monthly charge of $20 per user ID for a participant that elects to report to the ADF via an ADF web browser rather than through a direct FIX connection.
Rule 7510 additionally governs the FINRA Automated Data Delivery System, or FINRA ADDS, which provides an ADF participant access to ADF trade journal files associated with its own MPID. FINRA offers two optional FINRA ADDS services for the ADF: ADF Reporting Facility Data Delivery, free of charge for reports provided in response to the MPID's own requests through the FINRA ADDS website, and ADF Reporting Facility Data Delivery via Secure File Transfer Protocol, carrying a one-time set-up fee of $250 per subscribing MPID and a recurring monthly fee of $200 per subscribing MPID.
This $250/$200 SFTP pricing structure recurs identically for the analogous ORF Data Delivery SFTP service under Rule 7710 and the TRACE Data Delivery SFTP service under Rule 7730, a standardized convention FINRA applies uniformly across its trade reporting facilities, with the sole exception that the parallel ORF Clearing Data Delivery SFTP service carries a higher $300 monthly fee per subscribing clearing number.
Connectivity and Testing Requirements for Trade-Reporting-Only Participants
Rule 7520 addresses firms that use the ADF exclusively for trade reporting, without any accompanying quoting activity. FINRA's rules had never prohibited this use, but it was not common until FINRA's January 2016 Trade Reporting Notice instructed firms that routinely report OTC trades in NMS stocks to only one FINRA trade reporting facility to establish and maintain connectivity to a second facility, so they can continue supporting OTC trading as an executing broker if their primary facility experiences a widespread systems issue. Effective September 12, 2016, firms electing to use the ADF for trade reporting purposes only, and connecting via a Financial Information eXchange, or FIX, connection, are charged a monthly connectivity fee of $500, in addition to any separate charges the firm must pay Nasdaq, as FINRA's technology provider for the ADF, for the underlying FIX ports. These same firms must also participate in annual connectivity and capacity/stress testing.
These requirements apply only to firms with a FIX connection to the ADF; they do not extend to firms using only the ADF web browser, which instead pay the flat $20 per user ID monthly charge under Rule 7510(c). FINRA excuses qualifying firms from the annual connectivity testing requirement based on volume: firms that report at least 100 trades per month to the ADF are not required to participate in the testing. Separately, FINRA develops capacity projections for trade-reporting-only firms based on their existing usage of a TRF, and if a firm's TRF trading volume increases by more than 20% from one year to the next, that firm will be required to participate in capacity/stress testing to retain its ADF connectivity as a secondary reporting facility, regardless of whether it would otherwise qualify for the 100-trades-per-month exception.
Other Services
Rule 7530 provides a residual fee authority: FINRA or FINRA Regulation may impose and collect compensatory charges for data supplied upon request, in any circumstance where no other provision elsewhere in the Rule 7500 Series already establishes a charge for that service. Rule 7530 also governs testing charges for subscribers that conduct tests with the ADF's central processing facilities, currently set at $333 per hour, subject to two exceptions: the hourly charge does not apply to testing occasioned by new or enhanced services or software the ADF itself provides, nor to testing occasioned by ADF-initiated modifications made in response to a contingency.
Candidates working from older materials should note that Rule 7530 previously served an entirely different function: the original Rule 7530 assessed a minimum charge of $5,000 for installation costs associated with physically connecting to the ADF, along with additional charges for installation, removal, relocation, or maintenance of terminal equipment above that minimum. FINRA deleted this provision because it had become obsolete once the ADF transitioned to a fully software-based architecture, and renumbered the remaining provisions in the Rule 7500 Series to fill the resulting gap; the current Rule 7530, covering compensatory data charges and testing fees, bears no substantive relationship to the hardware-installation charge it replaced.
Relationship to Regulatory Transaction Fees and Related ADF Penalty Provisions
Candidates should distinguish the facility-specific charges established under the Rule 7500 Series from the entirely separate regulatory transaction fee FINRA and the national securities exchanges are required to collect and remit to the SEC under Section 31 of the Securities Exchange Act of 1934. The Section 31 fee applies to sales of equity securities required to be promptly reported to the ORF, the ADF, or a TRF, generally assessed against the clearing firm on the sell side, or against the buy-side firm where no FINRA member sits on the sell side. This regulatory transaction fee is unrelated to, and charged independently of, the trade reporting, comparison, connectivity, and testing charges established under Rule 7500. Candidates should also be aware that the Rule 7500 Series does not stand alone as the ADF's only cost-related provisions: registered ADF quoting participants are separately subject to certification and deposit requirements, along with capacity fees and penalties, under Rules 6271 and 7580, which apply specifically to quoting activity rather than to the trade-reporting-only participation addressed in the Rule 7500 Series.
Examination Relevance and Key Takeaways
Candidates should calibrate their expectations for this series against the exam they are sitting. The SIE, Series 7, Series 63, and Series 65 do not test the specific dollar figures in Rule 7500, since these exams focus on registered representative and investment adviser conduct, suitability, disclosure, and general securities industry structure rather than facility-level billing mechanics. For those exams, the relevant takeaway is conceptual: the ADF is a FINRA-operated facility, its use carries associated fees FINRA itself sets, and those fees fund FINRA's operation of the facility rather than SEC oversight, which is instead financed through the separate Section 31 regulatory transaction fee.
The Series 24 is the exam most likely to expect closer familiarity with this series, since principals supervise trade reporting operations, connectivity arrangements, and the associated billing relationships their firms maintain with FINRA facilities. Series 24 candidates should retain that Rule 7510 establishes per-side and per-trade transaction charges distinct from the flat $20 monthly web-browser fee, that Rule 7520's $500 monthly connectivity fee and annual testing obligations apply specifically to FIX-connected, trade-reporting-only participants, with a 100-trades-per-month volume threshold exempting a firm from testing unless its TRF volume has also grown by more than 20% year over year, and that Rule 7530's $333 hourly testing charge does not apply where the testing is required because of FINRA-initiated system changes rather than the participant's own initiative. Across all exam levels, the clearest, most durable distinction to retain is the one separating Rule 7500's facility-specific charges, which fund ADF operations, from the unrelated Section 31 regulatory transaction fee, which funds SEC market oversight.
