Securities Litigation

FINRA Rule 2360 requires that members file reports for each account that has an aggregate position of 200 or more options contracts on the same side of the market covering the same underlying security or index. The reports are commonly called Large Options Position Reports ("LOPRs"). The LOPRs allow FINRA to, among other things, confirm that firms have not exceeded the limits in FINRA Rule 2360(b)(3). Currently the position limit rules require that all accounts acting in concert must be aggregated to ensure position limit compliance. The rule change would require that the position report also be based on accounts acting in concert to ensure that they do not exceed to the 200 contract limit. This would enable the report to capture the entire position to monitor for position limit purposes. Currently, by interpretation and reliance on other standards, FINRA requires firms to report such information (i.e. report a position whether acting alone or in concert). The proposed rule change would codify the requirement that members must report this information. FINRA currently believes that firms are already complying with this as it has been a stated FINRA interpretation. In any event, an express rule will promote consistent regulation between FINRA and the options exchanges.