THE FIRM QUOTE COMPLIANCE SYSTEM

What is THE FIRM QUOTE COMPLIANCE SYSTEM

To assist in the enforcement of the firm quote rule and to assist in the resolution of backing away allegations FINRA has developed the Firm Quote Compliance System (FQCS). A firm that feels that a market maker failed to honor its quote must file a complaint within five minutes of the incident. The Market Regulation Department will enter the complaint into the FQCS to assist it in determining if a violation has occurred.


SecuritiesCE explains THE FIRM QUOTE COMPLIANCE SYSTEM

The FQCS allows FINRA to review the market conditions at the time of the allegation and to look for patterns of backing away. If FINRA feels that a firm failed to honor its quote it will usually award the aggrieved party a contemporaneous execution. A contemporaneous execution will result in a transaction at a price that is representative of the market conditions at the time of the allegation. If the aggrieved party fails to file a compliant within five minutes it does not relieve the firm who allegedly backed away of responsibility. However, failing to file a complaint on a timely basis makes the award of a contemporaneous execution less likely. Master these and other important concepts for the series 24 exam with the great series 24 resources here