What does FINRA Rule 11200's entry in the rulebook contain?

No rule text, but an amendment history and selected notices covering the whole subsection

No rule text, no amendment history and no selected notices — only its two child rules

No rule text, but Supplementary Material setting out a form used across the subsection

No rule text, but a scope provision naming which transactions the subsection does and does not reach

FINRA Rule 11100(d) imposes a requirement on a document whose sending requirements FINRA Rule 11210 establishes — the first rule sitting in the 11100 subsection and the second in the 11200 subsection. What does the pairing illustrate about how the 11100 and 11200 subsections work together?

That the later subsection may narrow requirements the earlier one imposes generally

That the two subsections impose parallel requirements a member must satisfy independently

That the earlier subsection establishes requirements which the later one then operationalises

That the earlier subsection's requirements yield wherever the later one addresses the same document

FINRA Rule 11130(a)(1) requires when, as and if issued transactions to be confirmed using its own Standard Forms, expressly cross-referencing FINRA Rules 11210(a), 11220 and 11860. What does that cross-reference establish?

That the general requirements operate alongside the Standard Forms rather than being displaced

That the Standard Forms apply only where the general requirements cannot be satisfied

That the Standard Forms replace the general comparison and confirmation requirements

That a member may elect between the Standard Forms and the general requirements

The title of the FINRA Rule 11200 subsection names two things. What is the relationship between them?

Two alternative procedures, a member electing which of them to use for a given trade

The routine practice every transaction generates, and the procedure for when it breaks down

Two successive stages, the second following the first on every transaction as a matter of course

A general procedure and its exception, the second applying only to specified security types

Within the lifecycle of an unacknowledged transaction, at what point does the Don't Know Notice procedure operate?

At the aged-fail stage, once the contract has remained unresolved for a defined period

At settlement, when the failure to deliver or to pay first becomes apparent to the parties

At the trade-date level, as the precursor to the later stage for contracts that then age

At the close-out stage, as the formal step by which the open contract is terminated

FINRA Rule 11210 states that it shall not apply to transactions clearing through a registered clearing organisation. How does FINRA Rule 11210's own carve-out relate to the exclusion FINRA Rule 11100(a)(1) already states?

It narrows the earlier exclusion, applying it to fewer transactions within this subsection than the Code does

It replaces the earlier exclusion entirely for every transaction that the 11200 subsection's two rules reach

It creates an exception to the earlier exclusion, reviving coverage for comparison and confirmation purposes specifically

It mirrors the earlier exclusion at the level of the subsection rather than the whole Code

Two members' transaction clears through a registered clearing organisation. Whose comparison, confirmation and exception-handling procedures govern it?

The clearing organisation's own comparison, confirmation and exception-handling procedures

Whichever procedures the member sending the first comparison elects to proceed under

No prescribed procedure at all, the buying and selling members arranging matters bilaterally

The general provisions of the 11100 subsection, which the carve-out leaves untouched

A member invokes the Don't Know Notice procedure against the contra-member on an over-the-counter trade between them. What question does the notice formally put to the contra-member?

Whether it knows of anything that will stop it settling the trade on the agreed date

Whether it recognises the transaction as one it made at all

Whether it acknowledges owing a correction to terms shown on its own comparison

Whether it recognises the member as an approved counterparty for trades of that size

Under the FINRA Rule 11200 subsection, what does the comparison or confirmation process accomplish for a trade between two members?

The selling party records the terms, and the buyer is bound by that record unless it objects

Each party records the terms for its own books, with no step comparing them to the other's

Each party documents the trade's terms and verifies them against the other party's

The clearing agency records the terms and verifies them on both parties' behalf at settlement

Two members execute an over-the-counter trade in a stock around its ex-dividend date, so the Uniform Practice Code's ex-date provisions bear on the trade. Where does the trade's documentary lifecycle begin?

With fixing the ex-date entitlement, the comparison following once that entitlement is known

With an ex-date notice the ex-date provisions prescribe, which stands in place of a comparison

With the delivery of the securities, the comparison then recording what was actually delivered

With the comparison or confirmation, the same basic step every transaction begins with

FINRA Rule 11190(b)(1) authorises the close-out of certain contracts that have been DK'd. Where may the DK designation it operates on have originated?

Either in the members' own Don't Know Notice procedure or in the reconfirmation service's own DK determination

In the reconfirmation service's own DK determination, a DK recorded between the members themselves being set aside

In a UPC Committee finding that the contra-member never agreed to the trade's terms

In the members' own Don't Know Notice procedure, the service repricing contracts but never designating them DK

A member executes ten separate over-the-counter trades with the same counterparty in one day, all to be settled directly between them. It proposes to send the counterparty a single summary of the day's business in place of individual comparisons. How does FINRA Rule 11210(b) treat that proposal?

It allows it, provided the summary lists each trade's security, quantity and price on a separate line of its own

It does not allow it, each of the ten trades needing its own properly executed Uniform Comparison or Confirmation

It allows it, since trades with a single counterparty on one day count as one transaction when confirmed together

It does not allow it, the day's ten trades having to be settled through a registered clearing organization instead of directly

A member receives its counterparty's Uniform Comparison for an over-the-counter trade and files it unread, intending to look at it only as settlement approaches. How does that handling stand under FINRA Rule 11210(a)(2)?

It complies, provided the member checks the document by the close of the next business day

It complies, since the rule requires only that the comparison be checked before settlement takes place

It falls short, since comparisons are to be compared upon receipt to find any discrepancies

It falls short only where the counterparty has asked in writing for the document to be checked

Members A and B find, on comparing their documents for an over-the-counter trade, that they show different prices. B, whose ticket departed from the agreed price, telephones A and the two agree the correct figure on the call. What does FINRA Rule 11210(a)(2) still require?

That both members exchange emails confirming the agreed price before the settlement date

Nothing further, the telephone call having settled the discrepancy between the two members

That A, having taken the call, record the agreed price in a note on its own trade file

That B send a corrected Uniform Comparison or Confirmation showing the agreed price

A member has executed an over-the-counter trade with a contra-member but has not yet sent its own comparison or confirmation of it, and nothing has come back from the contra-member either. Where does that leave the member as regards FINRA Rule 11210's Don't Know procedures?

Not yet able to use them, since they open to a party once it has sent its own comparison

Able to use the alternative procedure at once, though not the formal one, which calls for a comparison to have been sent first

Able to use either procedure at once, the contra-member's failure to send anything back being the one condition they set

Obliged to use the formal procedure, the Don't Know Notice on the prescribed form then serving in place of its own comparison

A confirming member sent its comparison of an over-the-counter trade. The contra-member insists that it sent its own comparison in good time, but that comparison never reached the confirming member. In deciding whether FINRA Rule 11210's Don't Know procedures are open to the confirming member, what counts?

What the contra-member says it sent, so the procedures are closed to the confirming member

What the confirming member actually received, so the procedures are open to it

Whether the contra-member can show a record of sending, which would close the procedures

Whether the members can agree that a comparison was sent, a dispute between them closing the procedures

Under FINRA Rule 11210's formal Don't Know procedure, a contra-member answers a notice by mail, and the copy it executes and returns is signed by a mailroom clerk who has no authority to discuss the trade. How does that answer stand?

It stands, since any manual signature given for the contra-member by one of its employees meets the requirement

It stands, since the rule's signing requirement governs only the notice the confirming member originally sends

It falls short, since each party's notice must be manually signed by someone authorized to discuss the trade

It falls short, since an answer under the formal procedure must be signed by a registered principal of the contra-member

Under FINRA Rule 11210's formal Don't Know procedure, a confirming member posts its notice by certified mail, return receipt requested, on a Monday. The contra-member gets it on Wednesday, and the confirming member gets the signed post office receipt back on Thursday. Treating every weekday as a business day, from which day does the one business day run after which the confirming member may treat an unanswered notice as a DK?

Tuesday, the first business day after the confirming member mailed the notice

Monday, the day the confirming member put the certified notice into the mail

Wednesday, the day the notice actually reached the contra-member's premises

Thursday, the day the confirming member received the signed post office receipt

Under FINRA Rule 11210's formal Don't Know procedure, a contra-member answers the confirming member's notice by messenger. Which member ends up keeping the dated and manually receipted proof that the answer was delivered, and which copy of the notice is it?

The contra-member, keeping the third copy once the confirming broker has receipted it and handed it back

The confirming member, keeping the third copy alongside its own fourth copy as its record of the exchange

The confirming member, keeping the second copy, which it dates and receipts before the messenger leaves

The contra-member, keeping the second copy, which the confirming broker dates and receipts and hands back to it

Under FINRA Rule 11210's alternative Don't Know procedure, a confirming member sends its notice through a messaging system that confirms delivery to the contra-member, then lets the system purge that delivery confirmation a week later. How does its conduct stand?

It has complied, the requirement being met once the system confirmed delivery at the time

It has breached its duty to record and retain verification of the notice's delivery

It has complied, since the duty to keep verification attaches to the contra-member's reply and not to this notice

It has breached the rule only if the contra-member later disputes that the notice reached it

Under FINRA Rule 11210's alternative Don't Know procedure, a confirming member's notice identifies the trade in question by giving only the trade date, the quantity and the contra-member's name. What does the notice lack?

A copy of the confirming member's original Uniform Comparison, attached so the contra-member can check its records

Nothing, since the trade date, the quantity and the counterparty's name together single out the trade

The details a comparison must carry, including a description of the security and the price

The trade's settlement date and the account number under which the confirming member booked it

Under FINRA Rule 11210's alternative Don't Know procedure, a contra-member replies to a notice with a message reading simply "DK", sent from a general trading-desk address. What does its reply fail to include?

A statement of the reasons the contra-member does not know the trade

The manual signature of a registered principal of the contra-member

A copy of the contra-member's own comparison of the trade

The name of the individual issuing the reply

Two members trade over the counter and settle the trade directly between themselves, with no clearing organization involved. A compliance officer concludes that, because the trade escapes FINRA Rule 11210's carve-out for cleared transactions, FINRA Rule 11210 requires the members to exchange Uniform Comparisons. What has that reasoning left out?

Whether the trade is within the Uniform Practice Code at all, the Code's own scope coming before the rule's own carve-out

Nothing, since a trade kept outside every clearing organization falls within FINRA Rule 11210 whatever the security the members traded

Whether the members agreed in writing to exchange comparisons, FINRA Rule 11210 reaching directly settled trades only where both consent

Whether the trade is large enough, FINRA Rule 11210 reaching directly settled trades only above a size that the UPC Committee fixes

Two members' trade clears through a registered clearing agency whose own rules provide that the rules of other organizations shall apply, so the trade is brought back within the Uniform Practice Code. Does FINRA Rule 11210 then govern the trade's comparison?

Yes, since every rule of the Code reaches whatever the Code as a whole has been brought back to cover

No, its own exclusion of such cleared trades carrying no exception of that kind

Yes, but its Don't Know procedures alone, the comparison itself being left to the clearing agency

No, since a trade that clears through a clearing agency can never be brought back within the Code

Two members trade units of a unit investment trust series in the secondary market. One member's comparison is complete in every respect except that it names the trust series without stating the series' payment option. How does that comparison stand under FINRA Rule 11220?

It falls short, since the comparison must also list the trust's portfolio holdings as at the trade date

It complies, since naming the trust series identifies the units adequately without anything more

It falls short, since an adequate description of a unit investment trust series includes its payment options

It complies, since unit investment trust units fall outside the Code and FINRA Rule 11220 with them

Two members trade, on a when, as and if issued basis, an income security that a reorganized company is to issue. What designation does the confirmation of that trade carry under FINRA Rules 11130 and 11220?

"Seller's option", since no delivery date for the trade can be fixed until the security is actually issued

"And accrued interest", since interest runs on such securities at their stated rate from the plan's effective date

"Part-redeemed", since the plan retires part of the principal of the company's old securities before the new issue

"Flat", since such trades are traded flat and the designation is to be carried where it applies

A member confirming a when, as and if issued trade uses the Standard Form that FINRA Rule 11130 prescribes. By when must it send the confirmation?

By the end of the day on the trade date, as for any other Uniform Comparison or Confirmation

Once the Committee has declared a settlement date for the security, the confirmation being dated from that declaration

When the security is actually issued, the Standard Form then recording the final terms on which it was issued

Within one business day of the trade, the Standard Form carrying a timetable of its own that displaces the general one

Two members' over-the-counter contract was DK'd between them and remains unresolved, but it has never been submitted to a reconfirmation and pricing service. May it be closed out under FINRA Rule 11190(b)(1)?

Yes, once the contra-member has been sent a second Don't Know Notice and has again failed to answer

No, since that close-out reaches only contracts that have been submitted to such a service

Yes, since the paragraph reaches every contract DK'd between two members, however the DK arose

No, since a contract DK'd between members can be ended only by a UPC Committee ruling on whether it stands

A member that participates in a registered clearing agency for clearing its over-the-counter trades has several aged fails open, but no fail reconfirmation and pricing service is offered to it. What does FINRA Rule 11190(a) require of it as regards such services?

That it report its open aged fails to FINRA each month for as long as no service is offered

That it reconfirm and reprice each aged fail bilaterally with its counterparty until a service is offered

Nothing for now, its duty being to participate in such services when they are offered

That it ask the clearing agency in writing to establish a service able to take its aged fails

Under FINRA Rule 11210's formal Don't Know procedure, a confirming member scans the prescribed Don't Know Notice form and sends it to the contra-member by electronic mail. Has the confirming member sent the notice as the formal procedure requires?

Yes, since the Code's definition of written notice in FINRA Rule 11120(h) includes a notice delivered by electronic mail

No, since electronic mail may carry the formal notice only where the contra-member has agreed in writing to receive it that way

Yes, since FINRA Rule 11210(d)(8) lets a Don't Know Notice travel through any medium that verifies delivery and receipt

No, since the formal notice is to be sent by certified mail, return receipt requested, or by messenger

FINRA Rule 11200 | Financial Regulation Courses

Comparisons or Confirmations and "Don't Know Notices"

FINRA Rule 11200 is the series-level marker for the second major subsection of the Uniform Practice Code — the organizational designation grouping the two substantive rules governing how member firms document and confirm the terms of their over-the-counter transactions with each other, and how a member proceeds when its counterparty fails to acknowledge a transaction at all.

Its title — Comparisons or Confirmations and Don't Know Notices — identifies the subsection's two core concerns: the comparison or confirmation process through which both parties to a trade document and verify the terms of that trade against each other, and the Don't Know Notice procedure — discussed in detail in FINRA Rule 11210 and connected directly to FINRA Rule 11190's reconfirmation and pricing service provisions examined in this dictionary's immediately preceding entry — through which a member formally raises the question of whether its counterparty even recognizes the transaction at all.

FINRA Rule 11200 has no operative text. Its FINRA.org page returns no rule text under The Rule tab, shows no amendment history, and lists no selected notices — only the two child rules organized beneath it: FINRA Rule 11210, Sent by Each Party, and FINRA Rule 11220, Description of Securities.

FINRA Rule 11200 sits within the 11000 Uniform Practice Code as the second major subsection, positioned between FINRA Rule 11190 — the final rule of the 11100 Scope of Uniform Practice Code subsection — and FINRA Rule 11210, the first substantive rule of the 11200 subsection itself.

The Logical Position of the 11200 Subsection Within the Uniform Practice Code's Transaction Lifecycle

The 11200 subsection's position immediately following the 11100 subsection reflects a coherent progression through the lifecycle of a securities transaction under the Uniform Practice Code.

The 11100 subsection, examined in detail throughout this dictionary's preceding entries, established the foundational scope and non-cancellation principles of FINRA Rule 11100, the UPC Committee governance structure of FINRA Rules 11110 through 11112, the definitional framework of FINRA Rule 11120, the trade date provisions of FINRA Rules 11120(g) and 11121, the contingent-contract framework of FINRA Rule 11130 for when, as and if issued/distributed securities, and the various ex-date and part-redemption frameworks of FINRA Rules 11140 through 11170 — culminating in FINRA Rule 11190's provisions for resolving aged fails through reconfirmation and pricing services.

Having established this foundational and contingency framework, the Uniform Practice Code's 11200 subsection turns to the most basic documentary step in any ordinary transaction's lifecycle — the comparison or confirmation that each party sends to memorialize and verify the terms of the trade by the end of the day on the trade date.

This is, in a sense, the Uniform Practice Code's return to first principles after the specialized contingencies addressed in the 11100 subsection's later provisions — every transaction, whether or not it involves the ex-date considerations of FINRA Rules 11140 through 11160, the part-redemption considerations of FINRA Rule 11170, or the contingent-contract considerations of FINRA Rule 11130, begins with the basic documentary step of comparison or confirmation that FINRA Rule 11210 governs.

The Relationship to FINRA Rule 11100(d)'s CUSIP Requirement

FINRA Rule 11200's subsection connects directly to a provision examined early in this dictionary's coverage of the Uniform Practice Code — FINRA Rule 11100(d)'s requirement that the CUSIP number be used on the Uniform Transfer Instruction Form, Uniform Delivery Ticket, and the Uniform Comparison or Confirmation.

The Uniform Comparison or Confirmation referenced in FINRA Rule 11100(d) is the very document whose sending requirements FINRA Rule 11210 establishes within the FINRA Rule 11200 subsection.

This connection illustrates how the Uniform Practice Code's foundational provisions in the 11100 subsection establish requirements — such as the mandatory CUSIP number — that are then operationalized through the specific documentary procedures of the 11200 subsection's rules.

The Relationship to FINRA Rule 11130(a)'s Standard Form Requirement

FINRA Rule 11200's subsection also connects to FINRA Rule 11130(a)(1)'s requirement that when, as and if issued/distributed transactions be confirmed using the Standard Forms set forth in FINRA Rule 11130's Supplementary Material .01, pursuant to the requirements of FINRA Rules 11210(a), 11220, and 11860. This cross-reference confirms that the general comparison and confirmation requirements FINRA Rule 11210 establishes within the FINRA Rule 11200 subsection — and the description-of-securities requirements FINRA Rule 11220 establishes — apply even to the specialized contingent contracts of FINRA Rule 11130, layered together with that rule's own Standard Form requirements rather than displaced by them.

The FINRA Rule 11200 subsection's comparison and confirmation framework thus functions as a general-purpose documentary layer that applies across the various specialized transaction types the Uniform Practice Code addresses, including but not limited to the when, as and if issued/distributed contracts of FINRA Rule 11130.

"Don't Know Notices" as the Subsection's Distinctive Contribution

While the comparison or confirmation half of FINRA Rule 11200's title addresses what might be considered routine documentary practice — every transaction generates a comparison or confirmation as a matter of course — the Don't Know Notices half of the title addresses what happens when that routine practice breaks down. As the search results confirm regarding FINRA Rule 11210's structure, when a party to a transaction sends a comparison or confirmation of a trade but does not receive a comparison or confirmation or a signed DK from the contra-member by the end of the day on the trade date, a specific Don't Know Notice procedure becomes available — involving a prescribed FINRA form, specific service methods including certified mail with return receipt requested or messenger delivery, and a defined response timeline giving the contra-member one business day after receipt to either confirm or DK the transaction.

This Don't Know Notice procedure is the documentary precursor to — and a key input for — the reconfirmation and pricing service framework of FINRA Rule 11190 examined in this dictionary's immediately preceding entry.

A transaction that generates a DK under the FINRA Rule 11210 Don't Know Notice procedure, and that subsequently ages without resolution, is precisely the kind of transaction that FINRA Rule 11190(a)'s mandatory reconfirmation and pricing service participation requirement is designed to address — and FINRA Rule 11190(b)(1)'s DK-based close-out authorization operates on contracts submitted to a reconfirmation and pricing service that have been DK'd, whether that DK designation originated through the FINRA Rule 11210 Don't Know Notice procedure at the trade-date level or through the reconfirmation and pricing service's own DK determination at the aged-fail level.

The Confirmed Carve-Out for Clearing-Agency-Processed Transactions

A significant structural feature confirmed from the FINRA Rule 11210 search results is that this Rule shall not be applicable to transactions which clear through the National Securities Clearing Corporation or other clearing organizations registered under the Exchange Act.

This carve-out within FINRA Rule 11210 mirrors, at the 11200 subsection level, the broader carve-out FINRA Rule 11100(a)(1) establishes at the level of the entire Uniform Practice Code — transactions compared, cleared, or settled through a registered clearing agency are generally excluded from Uniform Practice Code coverage, except to the extent the clearing agency's own rules provide that other organizations' rules apply.

This carve-out confirms, once again, the characterization of the Uniform Practice Code established in this dictionary's entry on FINRA Rule 11000 — the Uniform Practice Code, including its FINRA Rule 11200 subsection's comparison, confirmation, and Don't Know Notice procedures, functions as a backstop framework for the diminishing — but not eliminated — category of transactions that fall outside the highly automated processing of registered clearing agencies such as NSCC. For the overwhelming majority of equity transactions that clear through NSCC's continuous net settlement system, NSCC's own comparison, confirmation, and exception-handling procedures govern rather than FINRA Rule 11210's comparison, confirmation, and Don't Know Notice procedures — but for the transactions that fall outside that NSCC processing, FINRA Rule 11210's procedures remain the operative framework.

Connection to FINRA Rules 11100, 11130, 11190, 11210, and 11220

FINRA Rule 11200 connects to FINRA Rule 11100(a)(1) and (d) — the clearing-agency carve-out principle that FINRA Rule 11210 mirrors at the subsection level, and the CUSIP number requirement for the Uniform Comparison or Confirmation that FINRA Rule 11210 operationalizes.

It connects to FINRA Rule 11130(a)(1) — whose Standard Form requirements for when, as and if issued/distributed contracts operate alongside, rather than instead of, the general FINRA Rule 11210 and FINRA Rule 11220 requirements that FINRA Rule 11130(a)(1) expressly cross-references. It connects to FINRA Rule 11190 — whose reconfirmation and pricing service framework for aged fails represents the next stage in the documentary lifecycle for transactions that generate a DK under the FINRA Rule 11210 Don't Know Notice procedure and subsequently remain unresolved.

And it connects directly to its own two child rules — FINRA Rule 11210, which this dictionary will examine next and which establishes the comparison or confirmation sending requirements and the Don't Know Notice procedure itself, and FINRA Rule 11220, which establishes the description-of-securities content requirements for those comparisons and confirmations.

Sending and Comparing on the Trade Date in Practice

FINRA Rule 11210(a)(1) requires each party to a transaction to send a Uniform Comparison or Confirmation by the end of the day on the trade date. Suppose two members agree an over-the-counter trade in a corporate bond at 3:45 p.m. on a Tuesday and will settle it directly between themselves rather than through a clearing agency. Each member's comparison must go out by the end of that Tuesday. A member that sends its comparison first thing on Wednesday morning has missed the deadline, because the deadline is fixed to the end of the trade date, not to a number of hours after execution.

The receiving member's work does not end when the counterparty's comparison arrives. FINRA Rule 11210(a)(2) requires comparisons or confirmations to be compared upon receipt to ascertain whether any discrepancies exist. A member that files its counterparty's comparison unread and looks at it only when settlement approaches has not compared it upon receipt.

When the two documents disagree, the correction falls on the party in error, whichever party noticed the mismatch. Suppose Member A's comparison shows 5,000 shares at $20.10 and Member B's shows 5,000 shares at $20.01, and B, checking A's document on receipt, finds that its own trader's ticket records $20.10 as the agreed price. B is the party in error, so B sends a corrected Uniform Comparison or Confirmation.

The correction is itself a document. If A and B settle the price difference in a telephone call, the call does not satisfy FINRA Rule 11210(a)(2): the rule requires a corrected Uniform Comparison or Confirmation to be sent by the party in error.

A discrepancy need not be in the price or the quantity. FINRA Rule 11220 requires a comparison to carry any other information needed to ensure that the buyer and seller agree as to details of the transaction, such as "ex-warrants" or "flat" where applicable. If A's comparison describes a trade as "ex-warrants" and B's describes the same trade without that designation, the two documents disagree on a detail of the transaction, and the party in error sends a corrected comparison.

FINRA Rule 11210(b) requires a properly executed Uniform Comparison or Confirmation to be used for each transaction. A member that executes ten separate trades with the same counterparty in a day therefore uses a Uniform Comparison or Confirmation for each of the ten transactions, rather than one summary of the day's business.

When the Don't Know Procedures Become Available

Both of FINRA Rule 11210's Don't Know procedures open with the same condition: a party to a transaction sends a comparison or confirmation of a trade, but does not receive a comparison or confirmation or a signed DK from the contra-member by the end of the day on the trade date. The condition has two halves, and the member invoking the procedure must satisfy the first itself. A member that has sent no comparison of its own for the trade is not a party that "sends a comparison or confirmation", so it is not in a position to use either procedure until it has sent one.

The second half turns on what the member receives, not on what the contra-member says it sent. Suppose the contra-member states that it sent its comparison on the trade date, but the comparison never reached the confirming member by the end of that day. The confirming member has not received a comparison or confirmation, and the procedures are available to it.

A signed DK counts as a reply. If, by the end of the trade date, the contra-member has returned a signed DK, the confirming member has received one of the things the condition lists, and the Don't Know procedure is not the step that follows: the contra-member has already said it does not know the trade.

A comparison that arrives but does not match is a different case again. The member has received a comparison or confirmation, so the Don't Know condition is not met. The mismatch is dealt with by comparison and correction under FINRA Rule 11210(a)(2), the party in error sending a corrected Uniform Comparison or Confirmation.

Working the Formal Don't Know Notice Procedure

Under FINRA Rule 11210(c)(1) the confirming member sends the Don't Know Notice, on the form FINRA prescribes, by certified mail, return receipt requested, or by messenger. A notice sent by ordinary first class mail, without certified mail and a return receipt, is not sent by either of those methods.

Delivery by messenger has its own proof. The fourth copy of the notice must immediately be dated and manually receipted by the contra-member, imprinted with the contra-member's firm stamp, returned to the messenger, and thereafter retained by the confirming member. A messenger who leaves the notice at the contra-member's reception desk and walks away without that receipted and stamped fourth copy brings back none of the proof the rule requires.

The contra-member's time to answer runs from receipt. It has one business day after the notice is received to confirm or DK the transaction. Suppose a notice is mailed on a Monday and reaches the contra-member on the Wednesday. The one business day runs from the Wednesday, not from the Monday on which the notice was mailed, so the contra-member's window is the Thursday.

A contra-member that answers by messenger returns the second and third copies of the notice to the confirming member. The third copy is dated and manually receipted by the confirming broker, handed straight back to the messenger, and kept by the contra-member. The contra-member therefore holds the receipted proof of its own answer. A contra-member that answers by mail executes the second copy and sends it by certified mail, return receipt requested, and it too retains the returned, signed receipt.

Whichever way it answers, the contra-member's returned notice must indicate clearly whether it desires to confirm or to DK the transaction. A returned copy that is signed but leaves that choice unmarked does not do what the rule asks of the answer.

The signature rule applies to both sides. FINRA Rule 11210(c)(4) requires every Don't Know Notice sent by any party under paragraph (c) to be manually signed by a person authorized to pursue further discussions in respect to the transaction on behalf of the signing member, and paragraph (c)(2)(B) requires a contra-member answering by mail to execute the second copy in accordance with paragraph (c)(4). A contra-member's mailed answer signed by a mailroom clerk with no authority to discuss the trade does not meet that requirement.

The confirming member's own clock starts from its proof of delivery. If it receives no response by the close of one business day after it receives the fourth copy (messenger) or the post office receipt (mail), that constitutes a DK. Suppose the notice is mailed on a Monday, reaches the contra-member on the Wednesday, and the signed post office receipt reaches the confirming member on the Thursday. The confirming member's one business day runs from the Thursday, when it received the post office receipt, not from the Monday mailing or the Wednesday delivery.

A member need not order the official form, but a form it prints for itself must conform in every respect to the official one. The procedure works through numbered copies: the second copy for a mailed answer, the second and third for an answer by messenger, the fourth as the confirming member's proof of messenger delivery. A home-made form that does not carry those copies does not conform in every respect.

Working the Alternative Don't Know Procedure

FINRA Rule 11210(d) may be used in place of the formal procedure. A member that proceeds under paragraph (d) for a trade does not also send the FINRA form under paragraph (c) for that trade.

Notices under paragraph (d) may be delivered through any communications medium that provides verification of delivery and receipt. An electronic messaging system that records delivery and receipt of the notice can carry it. An oral message left with a receptionist, of which no record of delivery or receipt exists, provides no verification and cannot.

Using a suitable medium is not the end of it. The confirming member must also record and retain verification of delivery of each notice to the contra-member. A member whose messaging system confirmed delivery, but which then deleted that confirmation, has not retained the verification the rule requires.

The notice must identify the trade by giving the information described in FINRA Rule 11220: an adequate description of the security, the price at which the transaction was made, and any other information needed to ensure the buyer and seller agree as to details of the transaction. A notice that gives only the trade date, the quantity and the contra-member's name does not identify the trade as the rule requires. It must also ask the contra-member to confirm or "DK" the trade and give the name of the individual issuing the notice.

The contra-member's answer carries a name as well. Under paragraph (d)(4) its notice to confirm or "DK" the trade must include the name of the individual issuing it. A reply reading simply "DK", sent from a general desk address with no individual named, does not meet that requirement.

Which Trades the Subsection Reaches

FINRA Rule 11210 does not apply to transactions which clear through the National Securities Clearing Corporation or other clearing organizations registered under the Exchange Act. The exclusion is framed by how a trade clears. Two members that trade a corporate bond over the counter and settle it directly between themselves, without any clearing organization, are within FINRA Rule 11210, so each must send its Uniform Comparison or Confirmation by the end of the trade date.

FINRA Rule 11100(a)(1) excludes transactions compared, cleared or settled through a registered clearing agency from the Code, except to the extent that the clearing agency's rules provide that rules of other organizations shall apply. FINRA Rule 11210's own exclusion carries no such exception. So even where a clearing agency's rules bring the Code back to a trade that clears through it, FINRA Rule 11210's own words still exclude that trade from FINRA Rule 11210.

Settling directly does not by itself bring a trade within the subsection, because the Code's own scope comes first. Two members that trade municipal securities over the counter and settle directly between themselves are outside the Uniform Practice Code, which excludes transactions in municipal securities. FINRA Rule 11210 therefore imposes no comparison obligation on that trade, although no clearing organization is involved.

The same is true where a unit investment trust's trustee redeems units directly. FINRA Rule 11100(a)(4) provides that redemptions of securities directly by the trustee of a unit investment trust are not transactions between members for purposes of that subparagraph, so no Uniform Comparison under FINRA Rule 11210 is called for.

What the Comparison Must Carry, Including for When-Issued Trades

FINRA Rule 11220 requires a confirmation or comparison to include the price at which the transaction was made, in addition to an adequate description of the security. A comparison that names the security and the quantity but leaves the price blank does not meet FINRA Rule 11220.

For a unit investment trust, the description has a named element. Secondary market transactions between members in unit investment trust securities are within the Code, and the adequate description of the security must include the payment options on a unit investment trust series. A comparison for such a trade that names the trust series but not its payment option does not describe the security adequately.

When, as and if issued trades carry both layers. FINRA Rule 11130(a)(1) requires each party to send a written "when, as and if issued" or "when, as and if distributed" confirmation or comparison in the form set out in the rule's Supplementary Material .01, pursuant to the requirements of FINRA Rules 11210(a), 11220 and 11860. Because FINRA Rule 11210(a) is among the requirements that confirmation is sent pursuant to, a member confirming a when, as and if issued trade is held to FINRA Rule 11210(a)(1)'s timing: the confirmation goes out by the end of the day on the trade date.

The same cross-reference brings in FINRA Rule 11220's designations. Under FINRA Rule 11130(b)(2), when, as and if issued transactions between members in income or contingent interest securities of new or reorganized companies are traded "flat". A confirmation of such a trade is sent pursuant to FINRA Rule 11220, which names "flat" among the information a confirmation should include where applicable, so the confirmation carries the "flat" designation.

Describing a security that does not yet exist can be difficult, and the Code provides a source. Under FINRA Rule 11130(a)(3), the Committee will furnish, upon written request, an adequate description of any particular issue and of the plan under which it is proposed to be issued, for inclusion in all contracts or confirmations covering when, as and if issued or distributed transactions in it. Two members unsure how to describe such an issue on their confirmations can ask the Committee in writing.

After a DK: Where FINRA Rule 11190 Takes Over

FINRA Rule 11190(b)(1) permits a close-out of a contract submitted to a reconfirmation and repricing service which has been DK'd by the contra-party or is otherwise deemed a DK under the rules of the service. Submission to the service is part of the condition. A contract DK'd between two members that has never been submitted to such a service is not a contract that FINRA Rule 11190(b)(1) allows to be closed out.

The duty to use such services is itself limited. FINRA Rule 11190(a) requires each member or its agent that is a participant in a registered clearing agency, for purposes of clearing over-the-counter securities transactions, to participate in fail reconfirmation and pricing services when offered. A member that is not such a participant and does not clear through an agent that is one is not within the class of firms that paragraph (a) addresses.

Common Errors Across the Subsection

The errors these rules expose follow a few patterns. One is timing: a comparison sent the morning after the trade, or a counterparty's comparison left unchecked until settlement, misses FINRA Rule 11210(a), which sets the end of the trade date for sending and requires comparison upon receipt.

A second is reaching for the wrong remedy. A comparison that arrives but disagrees is corrected by the party in error; the Don't Know procedures are for the member that sent its comparison and received neither a comparison nor a signed DK back.

A third is weak proof. A formal notice sent by ordinary mail, a messenger delivery without the receipted and stamped fourth copy, or an alternative notice whose delivery verification was not kept leaves the confirming member without what the rule requires it to hold.

A fourth is an incomplete document: a comparison without the price, a unit investment trust description without the payment option, or a notice under the alternative procedure that does not give the information FINRA Rule 11220 describes.

Electronic Mail and the Formal Don't Know Notice

The Uniform Practice Code defines "written notice" broadly. Under FINRA Rule 11120(h), the term, as used in the Code, includes a notice delivered by hand, letter, facsimile transmission, electronic mail or other comparable media. FINRA Rule 11210(c)(1) names its own methods for the formal Don't Know Notice. It provides that the confirming member shall send the notice, on the form prescribed by FINRA, by certified mail, return receipt requested, or by messenger.

Suppose a confirming member scans the prescribed form and sends it to the contra-member by electronic mail. Electronic mail is neither certified mail, return receipt requested, nor delivery by messenger, so the notice has not been sent as paragraph (c)(1) requires. Nor does the electronic mail produce the proof that paragraph provides for: a returned, signed receipt attached to the fourth copy of the notice, or a fourth copy dated and manually receipted by the contra-member and imprinted with its firm stamp.

Under the other procedure, electronic mail can carry a notice if it provides the verification of delivery and receipt that procedure requires. FINRA Rule 11210(d) may be used in place of paragraph (c), and notices under paragraph (d) may be delivered through any communications medium which provides verification of delivery and receipt as required under paragraphs (d)(2) and (d)(6).

How the Contra-Member Answers

Under the formal procedure, FINRA Rule 11210(c)(2)(A) gives the contra-member one business day after the notice is received to either confirm or DK the transaction "in accordance with the provisions of paragraph (c)(2)(B) or (c)(2)(C)". Those two paragraphs are the two ways of answering. Under paragraph (c)(2)(B) the contra-member executes the second copy of the notice and sends it to the confirming broker by certified mail, return receipt requested. Under paragraph (c)(2)(C) it returns the second and third copies of the notice to the confirming member by messenger.

Suppose a contra-member's trader telephones the confirming member to say that the firm does not know the trade, and nothing more is sent. That call is neither an executed second copy sent by certified mail, return receipt requested, nor the second and third copies returned by messenger, so the contra-member has not answered in accordance with paragraph (c)(2)(B) or (c)(2)(C).

Under the alternative procedure, the contra-member's answer is itself a notice under paragraph (d). Paragraph (d)(4) requires the contra-member to send notice to the confirming member to either confirm or "DK" the trade. Paragraph (d)(6) requires both the confirming member and the contra-member to record and retain verification of the delivery and receipt of each notice issued under paragraph (d)(4). Paragraph (d)(8) lets notices under paragraph (d) be delivered through any communications medium which provides verification of delivery and receipt as required under paragraphs (d)(2) and (d)(6).

Suppose a contra-member answers an alternative notice by an unrecorded telephone call, and neither firm keeps any record of its delivery or receipt. Neither member has then recorded and retained the verification of delivery and receipt that paragraph (d)(6) requires each of them to keep for that answer. The duty to verify is not confined to the confirming member's own notice; it reaches the contra-member's answer as well.

The Alternative Procedure's Clock

The two Don't Know procedures start the confirming member's waiting period from different events. Under the formal procedure, FINRA Rule 11210(c)(3) runs it from the confirming member's own receipt of the fourth copy of the notice (messenger) or of the post office receipt (mail). Under the alternative procedure, FINRA Rule 11210(d)(5) runs it from receipt of the confirming member's notice: if the confirming member does not receive a response in the form of a notice from the contra-member by the close of one business day after receipt of the confirming member's notice, such shall constitute a DK.

Suppose a confirming member sends an alternative notice on a Monday by a courier service that records delivery and receipt, and the notice reaches the contra-member on the Tuesday. Treating each weekday as a business day, the one business day runs from the Tuesday, when the notice was received, not from the Monday, when it was sent. The confirming member's period therefore ends at the close of the Wednesday.

Examination Relevance and Key Takeaways

FINRA Rule 11200 is tested on the Series 7 and Series 24 examinations as the series-level marker for the Uniform Practice Code's comparison, confirmation, and Don't Know Notice framework — the documentary layer governing the most basic step in any over-the-counter transaction's lifecycle.

The key points to retain are these: FINRA Rule 11200 is the series-level marker for a two-rule subsection — FINRA Rule 11210, Sent by Each Party, and FINRA Rule 11220, Description of Securities — with no operative text, no amendment history, and no selected notices of its own; the subsection addresses two related concerns — the routine comparison or confirmation that each party to a transaction sends to document and verify the trade's terms, and the Don't Know Notice procedure available when a party fails to receive a comparison, confirmation, or signed DK from its counterparty by the end of the trade date; the Don't Know Notice procedure connects directly to FINRA Rule 11190's reconfirmation and pricing service framework, since a transaction that generates a DK and subsequently ages without resolution is precisely the category of transaction FINRA Rule 11190 addresses; the FINRA Rule 11200 subsection's comparison and confirmation framework operationalizes FINRA Rule 11100(d)'s mandatory CUSIP number requirement for the Uniform Comparison or Confirmation, and operates alongside — rather than being displaced by — FINRA Rule 11130(a)(1)'s Standard Form requirements for when, as and if issued/distributed contracts; and FINRA Rule 11210 itself confirms a carve-out excluding transactions that clear through NSCC or other registered clearing agencies from its coverage, mirroring the broader FINRA Rule 11100(a)(1) clearing-agency carve-out at the level of the entire Uniform Practice Code.