Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rules 5220, 5320, 6220, 6272, 6279, 6320A, 6320B, and 7620A To Conform to the New Definition of “Round Lot” Adopted by the Commission Under Regulation NMS

<NOTICE> SECURITIES AND EXCHANGE COMMISSION <DEPDOC>[Release No. 34-104441; File No. SR-FINRA-2025-015]</DEPDOC> <SUBJECT>Self-Regulatory Organizations; Financial Industry Regulatory Authority, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend FINRA Rules 5220, 5320, 6220, 6272, 6279, 6320A, 6320B, and 7620A To Conform to the New Definition of “Round Lot” Adopted by the Commission Under Regulation NMS</SUBJECT> <DATE>December 18, 2025.</DATE> Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (the “Act” or “Exchange Act”), <SU>1</SU> <FTREF/> and Rule 19b-4 thereunder, <SU>2</SU> <FTREF/> notice is hereby given that on December 3, 2025, the Financial Industry Regulatory Authority, Inc. (“FINRA”) filed with the Securities and Exchange Commission (the “Commission”) the proposed rule change as described in Items I and II below, which Items have been prepared by FINRA. FINRA filed the proposal as a “non-controversial” proposed rule change pursuant to Section 19(b)(3)(A)(iii) of the Act  <SU>3</SU> <FTREF/> and Rule 19b-4(f)(6) thereunder. <SU>4</SU> <FTREF/> The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. <FTNT> <SU>1</SU>  15 U.S.C. 78s(b)(1). </FTNT> <FTNT> <SU>2</SU>  17 CFR 240.19b-4. </FTNT> <FTNT> <SU>3</SU>  15 U.S.C. 78s(b)(3)(A)(iii). </FTNT> <FTNT> <SU>4</SU>  17 CFR 240.19b-4(f)(6). </FTNT> <HD SOURCE="HD1">I. Self-Regulatory Organization's Statement of the Terms of Substance of the Proposed Rule Change</HD> FINRA is proposing to amend FINRA Rules 5220, 5320, 6220, 6272, 6279, 6320A, 6320B, and 7620A to conform to the new definition of “round lot” adopted by the Commission under Regulation NMS. The text of the proposed rule change is available on FINRA's website at <E T="03">http://www.finra.org</E> and at the principal office of FINRA. <HD SOURCE="HD1">II. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> In its filing with the Commission, FINRA included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. FINRA has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. <HD SOURCE="HD2">A. Self-Regulatory Organization's Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change</HD> <HD SOURCE="HD3">1. Purpose</HD> <HD SOURCE="HD3">Background</HD> In 2020, the Commission adopted amendments to Regulation NMS to modernize the information provided within the national market system for NMS stocks. <SU>5</SU> <FTREF/> Prior to the MDI Rule amendments to Regulation NMS, “round lot” was not defined in the Exchange Act or SEC rules. Instead, exchange rules typically defined a round lot as 100 shares, but also allowed the exchange, or the primary listing exchange for the security, discretion to define it otherwise. <SU>6</SU> <FTREF/> Among other things, the MDI Rule amended Rule 600(b) of Regulation NMS to add a new definition of “round lot” that assigns each NMS stock a round lot size based on the stock's average closing price. In light of delays in the implementation of the MDI Rule, including the new definition of “round lot,” on September 18, 2024, the Commission adopted further amendments to Regulation NMS that, among other things, revised and accelerated the implementation of the new round lot definition under Rule 600(b)(93) to implement the new round lot definition on November 3, 2025, the first business day of November 2025. <SU>7</SU> <FTREF/> As adopted under the 2024 NMS Amendments, the new definition of “round lot” in Rule 600(b)(93) of Regulation NMS assigns each NMS stock a round lot size based on the stock's average closing price on the primary listing exchange during the prior Evaluation Period, ranging from 100 shares for NMS stocks priced $250.00 or less to one share for NMS stocks priced $10,000.01 or more. <SU>8</SU> <FTREF/> <FTNT> <SU>5</SU>   <E T="03">See</E> Securities Exchange Act Release No. 90610 (December 9, 2020), 86 FR 18596 (April 9, 2021) (File No. S7-03-02) (the “Market Data Infrastructure Rule” or “MDI Rule”). </FTNT> <FTNT> <SU>6</SU>   <E T="03">See</E> 2024 NMS Amendments, <E T="03">infra</E> note 7, 89 FR 81620, 81625 n.66. In practice, very few NMS stocks have a round lot size other than 100 shares. <E T="03">See</E> 2024 NMS Amendments, <E T="03">infra</E> note 7, 89 FR 81620, 81625 n.67 and accompanying text. </FTNT> <FTNT> <SU>7</SU>   <E T="03">See</E> Regulation NMS: Minimum Pricing Increments, Access Fees, and Transparency of Better Priced Orders, Securities Exchange Act Release No. 101070 (September 18, 2024), 89 FR 81620 (October 8, 2024) (File No. S7-30-22) (the “2024 NMS Amendments”). </FTNT> <FTNT> <SU>8</SU>   <E T="03">See</E> 17 CFR 242.600(b)(93). The “Evaluation Period,” as defined in Rule 600(b)(93)(iii) of Regulation NMS, means (i) all trading days in March for the round lot assigned on the first business day of May and (ii) all trading days in September for the round lot assigned on the first business day of November, during which the average closing price of an NMS stock on the primary listing exchange shall be measured by the primary listing exchange to determine the round lot for each NMS stock. Under Rule 600(b)(93)(iv), the round lot assigned is operative on (i) the first business day of May for the March Evaluation Period and continues through the last business day of October for the calendar year and (ii) the first business day of November for the September Evaluation Period and continues through the last business day of April of the next calendar year. Under Rule 600(b)(93)(ii), any security that becomes an NMS stock during an operative period is assigned a round lot of 100 shares. </FTNT> Several FINRA rules use the term “normal unit of trading” as the equivalent to the term “round lot” as used in exchange rules. As described in greater detail below, FINRA is proposing to amend these rules to conform to the new definition of “round lot” for NMS stocks under Regulation NMS. <SU>9</SU> <FTREF/> <FTNT> <SU>9</SU>  The new definition of “round lot” in Rule 600(b)(93) of Regulation NMS applies only to NMS stocks. The proposed conforming changes to FINRA rules are similarly limited to NMS stocks and do not affect the normal unit of trading as it may be applied to any other type of security. </FTNT> <HD SOURCE="HD3">Conforming Changes to FINRA Rules</HD> FINRA Rule 5220 (Offers at Stated Prices) provides that no member shall make an offer to buy from or sell to any person any security at a stated price unless such member is prepared to purchase or sell, as the case may be, at such price and under such conditions as are stated at the time of such offer to buy or sell. Supplementary Material .01 to Rule 5220 (Firmness of Quotations) discusses the expectations for making a “firm trading market” in a security, noting that a member “is expected at least to buy or sell a normal unit of trading in the quoted stock at its then prevailing quotations unless clearly designated as not firm or firm for less than a normal unit of trading when supplied by the member.” The proposed rule change would add a new sentence to Supplementary Material .01 to Rule 5220 to clarify that for purposes of Rule 5220, a “normal unit of trading” for an NMS stock means the “round lot” assigned to such NMS stock pursuant to Rule 600(b) of SEC Regulation NMS. FINRA Rule 5320 (Prohibition Against Trading Ahead of Customer Orders) provides that, except as provided in Rule 5320, a member that accepts and holds an order in an equity security from its own customer or a customer of another broker-dealer without immediately executing the order is prohibited from trading that security on the same side of the market for its own account at a price that would satisfy the customer order, unless it immediately thereafter executes the customer order up to the size and at the same or better price at which it traded for its own account. Among other things, Supplementary Material .05 to Rule 5320 (Odd Lot and Bona Fide Error Transaction Exceptions) provides an exception from these obligations for a member's proprietary trade that is “to offset a customer order that is in an amount less than a normal unit of trading[.]” The proposed rule change would add a new sentence to Supplementary Material .05 to Rule 5320 to clarify that, for purposes of Rule 5320, a “normal unit of trading” for an NMS stock means the “round lot” assigned to such NMS stock pursuant to Rule 600(b) of SEC Regulation NMS. The FINRA Rule 6200 Series (Alternative Display Facility) sets forth rules governing the operation of the FINRA Alternative Display Facility (“ADF”), which provides members with a facility for the display of quotations, the reporting of trades, and the comparison of trades in NMS stocks. FINRA Rule 6220 (Definitions) defines specified terms used in the ADF rules, including to define a “normal unit of trading” to mean “100 shares of a security unless, with respect to a particular security, the market where the security is listed determines that a normal unit of trading shall constitute other than 100 shares.” The proposed rule change would amend the definition of “normal unit of trading” in Rule 6220 to mean the “round lot” assigned to a security pursuant to Rule 600(b) of SEC Regulation NMS. <SU>10</SU> <FTREF/> <FTNT> <SU>10</SU> FINRA Rule 6272 (Character of Quotations) includes a duplicative definition of “normal unit of trading.” <E T="03">See</E> Rule 6272(a)(1). For clarity, the proposed rule change ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 21k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━