Can my firm program its system to automatically append the price override indicator to its trade reports?
A406.2: No. The purpose of the price override function is to reduce the likelihood that erroneously reported trade prices are disseminated to the tape. As stated in Trade Reporting Notice 9/17/2010, firms must not report trades in a manner designed to circumvent this important system and operational protocol. If a firm programs its system to automatically append the price override indicator – either before or after rejection of the trade – it would not be performing the necessary price check required by FINRA’s price validation protocol. Rejection of a trade outside the price validation parameters requires that the reporting firm confirm that the reported price is, in fact, the correct price as agreed upon by the parties. As noted in FAQ 406.1 and Trade Reporting Notice 9/17/2010, by using the price override indicator, the reporting firm is confirming that the price it originally entered is correct, even though it is away from the current market.
