Table of Contents
SERIES 7 | SERIES 24 | FINANCIAL REGULATION COURSES
FINRA Rule 11810 is the comprehensive operative framework for the buy-in remedy this dictionary has anticipated since FINRA Rule 11100(c) — the most extensive rule examined throughout this dictionary's coverage of the Uniform Practice Code, establishing the scope and exclusions for the buy-in remedy, the detailed notice-and-confirmation procedures governing how a buy-in is initiated and re-transmitted through chains of failing parties, the procedures for closing contracts, special provisions for unit investment trust securities, securities-in-transit extensions, UPC Committee close-out authority, a Liability Notice alternative for expiring instruments such as warrants and rights, cash-contract buy-ins, staffing requirements, and the treatment of accrued securities.
The rule operates through thirteen lettered paragraphs (a) through (m), plus three items of Supplementary Material including two sample buy-in forms.
Paragraph (a) establishes the basic buy-in right — not sooner than the third business day following the date delivery was due — and five categorical exclusions.
Paragraph (b) establishes the notice and confirmation framework, including the seller's rejection rights and the re-transmission chain.
Paragraph (c) establishes the buy-in notice's required content.
Paragraph (d) establishes the closing procedures, including a dedicated unit investment trust securities buy-in framework.
Paragraph (e) addresses incomplete buy-ins, including their interaction with FINRA Rule 11190's reconfirmation and pricing service. Paragraph (f) establishes the buyer's obligation to accept delivery prior to closing, incorporating FINRA Rule 11350's odd-lot exception verbatim.
Paragraph (g) addresses securities in transit.
Paragraph (h) establishes notice-of-execution requirements. Paragraph (i) addresses UPC Committee close-out rulings.
Paragraph (j) establishes the Liability Notice alternative for warrants, rights, convertibles, and similar expiring instruments. Paragraph (k) addresses cash contracts.
Paragraph (l) requires a dedicated buy-in desk. And paragraph (m) addresses accrued securities. FINRA Rule 11810 was most recently amended by SR-FINRA-2016-047 effective September 5, 2017, with an extensive prior amendment history extending back to January 2, 1968.
FINRA Rule 11810 sits within the 11800 Close-Out Procedures subsection of the 11000 Uniform Practice Code as its first substantive rule, immediately following FINRA Rule 11800's series marker and immediately preceding FINRA Rule 11820's selling-out framework.
FINRA Rule 11810(a) establishes the foundational right — a securities contract that has not been completed by the seller according to its terms may be closed by the buyer not sooner than the third business day following the date delivery was due, in accordance with this Rule.
This not sooner than the third business day formulation establishes a minimum waiting period — directly paralleling the structure this dictionary observed in FINRA Rule 11740(f)'s timing restriction on mark-to-market closures — before the buyer may initiate the buy-in process, giving the seller a brief window after the delivery-due date before the buy-in remedy becomes available.
FINRA Rule 11810(a) then establishes five categorical exclusions. Exclusion (1) — where the contract is subject to the "buy-in" requirements of a national securities exchange or a registered clearing agency, in which case those requirements apply instead — reflects the same clearing-agency-and-exchange deference this dictionary has observed throughout the Uniform Practice Code, paralleling FINRA Rule 11100(a)(1)'s general clearing-agency carve-out and FINRA Rule 11210(a)(3)'s identical exclusion for NSCC-cleared transactions.
Exclusion (2) — transactions in securities exempted under Exchange Act Section 3(a)(12) — and exclusion (3) — transactions in municipal securities as defined in Exchange Act Section 3(a)(29) — exclude categories of securities subject to their own distinct regulatory frameworks (Section 3(a)(12) covers various government and exempted securities; municipal securities are separately regulated, including by the MSRB).
Exclusion (4) addresses redeemable securities issued by registered investment companies, with a carve-back directly relevant to this dictionary's earlier coverage — provided, however, that this Rule shall apply to secondary market transactions between members in any security issued by a registered investment company classified as a "unit investment trust" under Section 4 of the Investment Company Act. This carve-back confirms that, notwithstanding the general exclusion of redeemable investment company securities from FINRA Rule 11810's buy-in framework, secondary market transactions between members in unit investment trust securities specifically remain within FINRA Rule 11810's scope — directly explaining why paragraph (d)(2) below establishes a dedicated UIT buy-in framework. The final sentence of exclusion (4) — redemption of securities directly by the trustee of the unit investment trust are not transactions between members for purposes of this subparagraph — clarifies that the UIT carve-back applies only to secondary-market member-to-member transactions, not to the trustee's own redemption process, which remains outside FINRA Rule 11810 under the general exclusion.
Exclusion (5) — transactions in Direct Participation Program securities as defined in Rule 2310 — directly parallels FINRA Rule 11100(a)(5)'s general exclusion of DPP securities, with the same except as otherwise provided structure this dictionary traced through FINRA Rules 11580 and 11581 for transfer purposes; here, however, FINRA Rule 11810(a)(5) establishes no carve-back, meaning DPP securities remain categorically outside the buy-in framework even for the secondary-market transactions FINRA Rule 11580 brought within the transfer framework.
FINRA Rule 11810(b) establishes the detailed notice framework that operationalizes the buy-in right. Paragraph (b)(1) establishes the core timing — written notice of "buy-in" shall be delivered to the seller at its office not later than 12:00 noon, Eastern Time (ET), two business days preceding the execution of the proposed "buy-in." This Eastern Time anchor — the first explicit time-zone reference this dictionary has encountered in its coverage of the Uniform Practice Code — reflects the national, rather than purely local-community, character of the buy-in notice framework, in contrast to the community hours standards of FINRA Rules 11320(h), 11410(a), and 11710(c)(1).
Paragraph (b)(2) defines written notice expansively to include electronic notice through a medium providing immediate return receipt capability — including but not limited to facsimile transmission, a computerized network facility, or the electronic functionality of a registered clearing agency — confirming the kind of technology-neutral, electronic-communication-inclusive approach this dictionary observed in FINRA Rule 11210(d)(8)'s any communications medium formulation.
Paragraph (b)(3) requires the buyer to maintain confirmation of receipt as part of its books and records — a recordkeeping requirement consistent with the documentary-trail emphasis this dictionary has observed throughout the Uniform Practice Code.
Paragraph (b)(4) establishes the seller's rejection mechanism — a deemed-acceptance default (if the seller does not send a signed, written response stating its rejection by 6:00 p.m. ET on the date of issuance, the notice is deemed accepted) paired with a proof-of-fail-obligation right — prior to the proposed effective date of the "buy-in," the seller has a right to request proof of fail obligation from the buyer and the buyer shall deliver such proof. The final two sentences establish important limiting principles — in no event shall a buyer be entitled to a "buy-in" that exceeds the liability of a seller under an unsettled securities contract because of the failure of the seller to reject a "buy-in" notice, and a buyer may not execute a "buy-in" to the extent it fails to deliver the proof of fail obligation. These provisions ensure the deemed-acceptance default does not become a mechanism for buy-ins exceeding the seller's actual contractual liability, and that the buyer's own compliance (providing proof of fail when requested) is itself a precondition to executing the buy-in.
Paragraph (b)(5) establishes the re-transmission chain mechanism — notice shall be redelivered immediately by the receiving party to other parties from which the securities involved are due in the form of a re-transmitted notice, with re-transmitted notices subject to a 12 noon ET deadline on the business day preceding the original execution time, and not prior to the time specified in the original notice. Each party receiving a re-transmitted notice is subject to the same paragraphs (b)(3) and (4) confirmation and rejection framework, with rejections directed to the party from which the re-transmitted notice was received. This re-transmission chain mechanism directly implements the chain-of-fails concept — a buyer's failure to receive delivery may itself stem from that buyer's own seller's failure to receive delivery from a further seller, and so on, with FINRA Rule 11810(b)(5) allowing the buy-in notice to propagate backward through this entire chain.
Paragraph (b)(6) establishes a minimum-quantity standard for partial buy-in notices — when notice of "buy-in" is given for less than the full amount of securities due, it shall not be for less than one trading unit, connecting to the units-of-delivery framework this dictionary examined throughout FINRA Rules 11360 through 11365.
FINRA Rule 11810(c) establishes the buy-in notice's required content — the date the contract will be closed out, the quantity and contract value of the securities, the settlement date, and any other information deemed necessary to properly identify the contract — directly paralleling FINRA Rule 11220's any other information deemed necessary to ensure that the buyer and seller agree as to details of the transaction formulation, applied here to the buy-in notice context. The notice must further state that unless delivery is effected at or before 3:00 p.m. ET on the "effective date," the security may be bought-in for the account of the seller — the for the account formulation this dictionary has traced throughout FINRA Rules 11190, 11340, 11630, and 11740. Each notice must also state the name and telephone number of the individual authorized to pursue further discussions — directly paralleling FINRA Rule 11210(c)(4)'s manual-signature-by-an-authorized-person requirement and FINRA Rule 11221(d)(1)'s name-of-the-individual-issuing-the-notice requirement.
FINRA Rule 11810(d)(1)(A) establishes the seller's delivery obligation upon receiving an unrejected buy-in notice — deliver at or before 3:00 p.m. ET on the effective date — with a specific accommodation where the seller notifies the buyer that some or all securities (not less than one trading unit) are in the seller's physical possession and will be promptly delivered: in that scenario, the buy-in shall not be executed with respect to those securities, the issuing member shall accept and pay for them if delivered promptly, and the seller bears liability for any resulting damages if the promised prompt delivery does not occur.
Paragraph (d)(1)(B) establishes the core execution mechanism — on the seller's failure to deliver or obtain a stay, the buyer may close the contract by purchasing all or part of the securities necessary to satisfy the buy-in notice amount. This paragraph also establishes that delivery or execution of the buy-in operates to close out all contracts covered under re-transmitted notices issued pursuant to the original notice — confirming that the re-transmission chain established under paragraph (b)(5) resolves as a unit once the originating buy-in is executed or satisfied. A specific timing-mismatch provision addresses the scenario where a re-transmitted notice is sent before delivery/execution but received after — in that case, the sending member may, unless otherwise agreed, promptly re-establish, by a new sale, the contract with respect to which such notice was sent. The final sentence confirms execution flexibility — a buy-in may be executed from the member's long position and/or from customers' accounts maintained with such member.
Paragraph (d)(1)(C) addresses the specific scenario where the buyer is a customer (other than another member) and a clearing corporation fails to effect delivery — the contract must be closed by purchasing for "cash" in the best available market, or at the buyer's option for guaranteed delivery, for the account and liability of the party in default.
Paragraph (d)(1)(D) establishes a documentation expectation — members must be prepared to defend the price at which the "buy-in" is executed relative to the current market at the time of the "buy-in" — a best-execution-adjacent standard ensuring buy-in prices reflect genuine market conditions rather than prices disadvantageous to the defaulting party.
Paragraph (d)(2) establishes the dedicated unit investment trust securities buy-in framework this dictionary anticipated from FINRA Rule 11810(a)(4)'s carve-back. Two additional options are available beyond paragraph (d)(1)'s general framework. Option (A) — by mutual agreement, accepting comparable substitute UIT securities (in quantity, quality, yield or price, and maturity) in lieu of the original obligation, with the original contract concurrently canceled and any additional expenses or acquisition costs borne by the seller. Option (B) — where paragraph (d)(1)'s options are unavailable and the parties cannot agree on option (A) — requires the seller to repurchase the UIT securities, for the seller's account and liability, on terms requiring the seller to bear the burden of any change in the market price from the original contract price, with accrued interest, explicitly defined: if the current market price exceeds the original contract price, the seller repurchases at the current (higher) market price; if the current market price is below the original contract price, the seller repurchases at the original (higher) contract price with accrued interest — in both directions, the seller bears the unfavorable side of the price movement, directly connecting to FINRA Rule 11620's accrued interest computation framework and FINRA Rule 11363's UIT units-of-delivery framework examined earlier in this dictionary's coverage.
FINRA Rule 11810(e)(1) establishes the expiration consequence for an incomplete buy-in — if a buy-in is not completed pursuant to paragraph (d) on the specified (or extended) day, the notice shall expire at the close of business on that day. This expiration mechanism means a buy-in notice does not persist indefinitely — it is a time-bounded authorization that lapses if not acted upon.
Paragraph (e)(2) directly resolves the connection this dictionary anticipated between FINRA Rule 11810 and FINRA Rule 11190's reconfirmation and pricing service framework — when a "buy-in" notice for a reconfirmation eligible security is pending during a reconfirmation and pricing period and one or more members are participating in such a service, the buy-in notice shall be canceled, with written notice of cancellation required before the original or extended execution date (failure to so notify may result in an execution), and any new buy-in notice may be issued no earlier than the first business day following the final reconfirmation and pricing settlement date. This provision directly implements the protection for members against potential liability or losses that might arise when a buy-in is pending during a RECAPS processing cycle that this dictionary's FINRA Rule 11190 entry anticipated from Notice to Members 89-4 — confirming that the 1989-era amendment addressing RECAPS interaction (reflected in Notice 89-44 and 89-56, both among FINRA Rule 11810's selected notices) produced exactly the FINRA Rule 11190(b)-and-FINRA Rule 11810(e)(2) coordination this dictionary anticipated.
FINRA Rule 11810(f) establishes the buyer's continuing obligation to accept delivery prior to closing — the buyer shall accept delivery of the securities called for by the contract, provided that in the case of a partial delivery of securities called for by the contract, the portion remaining undelivered at the time the buyer proposes to execute the "buy-in" is not an amount which includes an odd-lot which was not part of the original transaction.
This provision is, in substance, identical to FINRA Rule 11350's part delivery framework examined in this dictionary's earlier coverage — the same mandatory acceptance principle, and the same odd-lot exception (a part delivery whose remainder would create a new, not-originally-contemplated odd-lot need not be accepted), now operating specifically in the context of a pending buy-in. This confirms that FINRA Rule 11350's general part-delivery principle remains fully operative even once a buy-in notice has been issued — the seller retains the ability to deliver (and the buyer retains the corresponding obligation to accept, subject to the same odd-lot exception) right up until the buy-in is actually executed, with FINRA Rule 11810(d)(1)(B)'s confirmation that securities delivered subsequent to the buy-in notice are considered as delivered pursuant to that notice reinforcing this continuing-delivery-acceptance framework.
FINRA Rule 11810(g) establishes a mandatory extension mechanism — if, prior to closing, the buyer receives written or comparable electronic notice from the seller stating that the securities (except those due from a depository) are in transfer, in transit, being shipped that day, or due from a depository (with certificate numbers given), then the buyer must extend the execution date of the buy-in for seven calendar days from the date delivery was due. Upon the seller's request, the Committee may grant an additional seven-calendar-day extension due to the circumstances involved.
This extension mechanism reflects a recognition that a seller's failure to deliver by the buy-in deadline does not necessarily indicate the seller cannot or will not deliver at all — securities genuinely in transfer, in transit, or in the shipping process may simply require additional time to arrive, and FINRA Rule 11810(g) provides a structured, mandatory (not merely discretionary) accommodation for this scenario, with the Committee's additional-extension authority under FINRA Rule 11110's general interpretive framework providing a further accommodation where circumstances warrant.
FINRA Rule 11810(h) establishes the post-execution notice framework — immediate notification, no later than 6:00 p.m. ET on the execution date, of the quantity purchased and price paid, in written or electronic form with immediate receipt capabilities (or telephone if such media is unavailable, with written/electronic follow-up having next-day receipt capabilities), with formal confirmation forwarded by 9:30 a.m. ET the following business day. This notification framework must also flow to succeeding parties in any re-transmitted notice chain, with a re-transmitted buy-in's execution operating to close out all contracts covered under that re-transmitted notice. Statements of resulting money differences must be provided immediately, with any resulting money difference paid by 3:00 p.m. ET on the business day after the settlement date of the executed buy-in.
This same-day-then-next-day notification structure directly parallels FINRA Rule 11190(b)(2)'s as promptly as possible on the day of execution standard and FINRA Rule 11740(g)'s same-day-notice-plus-formal-confirmation structure, confirming FINRA Rule 11810(h) as the most detailed instance of this recurring notification pattern this dictionary has encountered.
FINRA Rule 11810(i) establishes two triggers for immediate close-out authority, both connecting directly to FINRA Rule 11110's UPC Committee framework. Paragraph (i)(1) addresses a national securities exchange ruling that all open contracts with a particular dual-member firm should be closed out immediately — members may close out as directed by the exchange. Paragraph (i)(2) addresses the UPC Committee's own authority — where the Committee ascertains that a court has appointed a receiver for a member due to insolvency or failure to meet obligations, or that a member cannot meet its obligations as they become due and closure is in the public interest, the Committee may, in its discretion, issue notification that all open contracts with that member may be closed out immediately.
Paragraph (i)(3) defines close-out immediately for this paragraph's purposes — buy-ins may be executed without prior notice of intent, and sell-outs may be executed without making prior delivery — confirming that paragraph (i) represents the most expedited close-out mechanism this dictionary has encountered, dispensing with both the notice-and-rejection framework of paragraphs (b) through (h) for buy-ins and the prior-delivery requirement for sell-outs. Paragraph (i)(4) establishes the account-and-liability allocation (for the account and liability of the member in question) and a notification requirement — sent immediately pursuant to the FINRA Rule 11200 Series confirmation provisions, at least thirty minutes before the close-out — directly cross-referencing FINRA Rule 11210 and FINRA Rule 11220's confirmation framework examined earlier in this dictionary's coverage.
FINRA Rule 11810(j) establishes the Liability Notice alternative this dictionary anticipated would connect to FINRA Rule 11840's Rights and Warrants framework. Paragraph (j)(1)(A) applies to contracts for warrants, rights, convertible securities or other securities subject to expiring events — called for redemption, due to expire by their terms, subject to a tender or exchange offer, or subject to other expiring events such as a record date — where the expiration date is the settlement date or later. For such contracts, the receiving member may deliver a Liability Notice to the delivering member as an alternative to the paragraphs (b)-through-(h) close-out procedures, with transmission required through a registered clearing agency's automated notification service where both parties participate in one, or otherwise via written/electronic media with immediate receipt capabilities, sent no later than two hours prior to the relevant cutoff time.
Paragraph (j)(1)(B) addresses a related but distinct category — deliverable instruments with a daily-exercisable exercise provision, where the contract's settlement date is on or before the requested exercise date — establishing an 11:00 a.m. ET deadline for the Liability Notice (with re-delivery to another member permitted no later than noon ET the same day), and requiring the receiving member to notify the defaulting member of the exact liability amount the next business day if the contract remains undelivered at expiration and has not been canceled by mutual consent.
Paragraph (j)(2) establishes the substantive liability — if the delivering member fails to deliver on the expiration date, it shall be liable for any damages which may accrue thereby, with the Liability Notice serving as notification of the existence of a claim for damages, and all claims for such damages... made promptly. Paragraph (j)(3) defines expiration date as the latest time and date on which securities must be delivered or surrendered, up to and including the last day of the protect period, if any — connecting to the kind of protect-period concepts relevant to options and rights exercise. Paragraph (j)(4) establishes the consequence of non-utilization — if the Liability Notice procedures are not utilized, contracts may be bought-in without prior notice, after normal delivery hours, on the expiration date, for the account and risk of the defaulting member — confirming that paragraph (j) provides an alternative to, rather than a replacement of, the buy-in framework; a receiving member may choose either the Liability Notice route (preserving a damages claim without executing a buy-in) or, if that route is not utilized, the without-prior-notice buy-in route paragraph (j)(4) describes.
FINRA Rule 11810(k) establishes the buy-in framework for cash contracts and guaranteed-delivery contracts — such contracts may be bought-in without notice during normal trading hours on the day following the date delivery is due, otherwise the paragraphs (b)-through-(g) procedures apply, with paragraph (h) notification still required in all cases, and execution for the account and risk of the defaulting broker-dealer.
This provision directly resolves the cash-transaction thread this dictionary has traced through FINRA Rule 11320(a)'s same-day delivery requirement and FINRA Rule 11620(a)'s same-day interest accrual cutoff for cash transactions — given that a cash transaction's delivery is due on the trade date itself, FINRA Rule 11810(k)'s without notice on the day following the date delivery is due standard represents the buy-in timeline's compression to match the compressed (same-day) settlement timeline that distinguishes cash transactions throughout the Uniform Practice Code.
FINRA Rule 11810(l) establishes an operational infrastructure requirement — members shall have a "buy-in" section or desk adequately staffed to process and research all "buy-ins" within the required time frames of this Rule — an institutional-capacity requirement ensuring members can actually comply with the numerous same-day and next-day deadlines paragraphs (b) through (k) establish.
FINRA Rule 11810(m) addresses accrued securities — stock, rights, or warrants which accrue to a buyer shall be deemed due and deliverable to the buyer on the payable date, with any such securities remaining undelivered at that time subject to the buy-in procedures. This payable date anchor directly parallels FINRA Rule 11630(e)'s redemption-of-due-bills standard (redeemable on the date the security or rights are issued, or as soon thereafter as practicable) — confirming that once a due-bill's underlying distribution becomes payable, the buy-in framework (in addition to, or as an alternative to, FINRA Rule 11630(f)'s specific due-bill buy-in remedy) becomes available for whatever remains undelivered.
Supplementary Material .01 addresses early market closures — for purposes of paragraphs (c) and (d)(1)(A), where an early market closure is announced, members may take the required action not earlier than one hour prior to the announced early closure — an accommodation ensuring the 3:00 p.m. ET deadlines paragraphs (c) and (d)(1)(A) establish remain meaningful relative to whatever the actual trading day's close turns out to be.
Supplementary Material .02 addresses securities delivered after buy-in execution — where the seller delivers after the buy-in order has been placed, the securities may be returned to the seller if the buy-in was executed in accordance with this Rule before it could reasonably be cancelled by the initiating party — confirming that a buy-in, once properly executed, is not undone merely because the seller's delivery arrives shortly thereafter, provided the buy-in itself was properly executed before the initiating party could reasonably have canceled it upon learning of the seller's delivery.
Supplementary Material .03 sets forth two Sample Buy-In Forms — Notice of Buy-In and Notice of Re-transmitted Buy-In — each containing fields for the member's name, locality and date, the recipient, the quantity and description of the security, the contract date, contract price, and settlement date, and operative language tracking paragraphs (b) and (c)'s requirements, including each form's note confirming the re-transmitted buy-in mechanism's availability where securities are due from another FINRA member.
FINRA Rule 11810's amendment history — effective January 2, 1968; February 9, 1968; February 21, 1969; September 1, 1969; March 1, 1970; June 1, 1970; September 1, 1970; August 1, 1972; December 1, 1972; May 1, 1973; January 13, 1977; April 7, 1978; SR-NASD-82-1 effective March 12, 1982 and March 18, 1983; SR-NASD-83-8 effective October 14, 1983; SR-NASD-84-20 effective January 1, 1985; SR-NASD-87-10 effective June 1, 1989; SR-NASD-89-34 effective February 1, 1990; SR-NASD-91-61 effective March 1, 1993; SR-NASD-95-50 effective December 28, 1995; SR-NASD-2005-087 effective August 1, 2006; SR-NASD-2007-035 effective March 13, 2008; SR-FINRA-2010-030 effective December 15, 2010; and SR-FINRA-2016-047 effective September 5, 2017 — represents, by a substantial margin, the most extensively and continuously amended rule this dictionary has examined throughout its coverage of the Uniform Practice Code.
This extensive history reflects the buy-in framework's centrality to the Uniform Practice Code's entire remedial architecture — as this dictionary has traced throughout its coverage, FINRA Rules 11100(c), 11190(b), 11340(d), 11630(f), and 11740(e) all point toward FINRA Rule 11810 as the ultimate remedial mechanism for failed performance, and the framework's near-continuous refinement across more than five decades — including the RECAPS-related 1989-era amendments reflected in Notices 89-44 and 89-56, and the most recent September 2017 amendment alongside FINRA Rule 11320, FINRA Rule 11620, and other settlement-cycle-related provisions — confirms FINRA Rule 11810's foundational and continuously-relevant role.
FINRA Rule 11810 connects to FINRA Rule 2310 — directly cross-referenced in FINRA Rule 11810(a)(5)'s Direct Participation Program exclusion. It connects to FINRA Rule 11100(c) — the foundational non-cancellation principle this rule provides the detailed buyer's-remedy mechanics for. It connects to FINRA Rule 11110 — the source of the UPC Committee authority FINRA Rule 11810(g) and (i) both invoke. It connects directly and substantively to FINRA Rule 11190(b) — whose RECAPS protection FINRA Rule 11810(e)(2) directly implements. It connects to FINRA Rule 11200, FINRA Rule 11210, and FINRA Rule 11220 — directly cross-referenced in FINRA Rule 11810(i)(4)'s notification requirement and reflected throughout FINRA Rule 11810(c)'s content requirements. It connects to FINRA Rule 11320 — both through FINRA Rule 11810(k)'s cash-contract framework mirroring FINRA Rule 11320(a)'s same-day delivery, and through the shared September 5, 2017 amendment date. It connects to FINRA Rule 11340(d) — a structural parallel for seller-borne-cost self-help remedies. It connects directly and verbatim to FINRA Rule 11350 — whose odd-lot exception FINRA Rule 11810(f) reproduces in the buy-in context. It connects to FINRA Rule 11363 — whose UIT units-of-delivery framework underlies FINRA Rule 11810(d)(2)'s UIT-specific buy-in options. It connects to FINRA Rule 11620 — whose accrued interest framework FINRA Rule 11810(d)(2)(B)'s with accrued interest language invokes. It connects directly and by explicit cross-reference to FINRA Rule 11630(f) and (e) — whose due-bill buy-in remedy and redemption-timing standard FINRA Rule 11810(m)'s payable-date framework parallels. It connects to FINRA Rule 11740(e) — a structural parallel for account-and-liability close-out mechanics and same-day notification requirements. It connects to FINRA Rule 11820 — the next rule in the FINRA Rule 11800 subsection, establishing the seller's converse sell-out remedy. And it connects to FINRA Rule 11840 — whose Rights and Warrants framework this dictionary anticipates will elaborate further on the categories FINRA Rule 11810(j)(1)(A) enumerates (warrants, rights, convertible securities, and similar expiring instruments).
FINRA Rule 11810 is tested extensively on the Series 7 and Series 24 examinations as the comprehensive buy-in framework — the most detailed and frequently-amended provision in the entire Uniform Practice Code, establishing the complete procedural mechanics for the buyer's remedy when a seller fails to deliver.
The key points to retain are these: FINRA Rule 11810(a) permits a buy-in not sooner than the third business day following the date delivery was due, subject to five exclusions — exchange/clearing-agency buy-in rules, Section 3(a)(12) exempted securities, municipal securities, redeemable investment company securities (except secondary-market UIT transactions between members), and DPP securities under FINRA Rule 2310; FINRA Rule 11810(b) establishes the 12:00 noon ET two-business-days-prior notice requirement, electronic notice provisions, the seller's 6:00 p.m. ET same-day rejection deadline with deemed acceptance and proof-of-fail-obligation rights, the re-transmission chain mechanism, and the one-trading-unit minimum for partial notices; FINRA Rule 11810(c) establishes required notice content including the 3:00 p.m. ET effective-date deadline and authorized-individual contact information; FINRA Rule 11810(d) establishes the general closing procedures including the physical-possession accommodation, the re-transmission close-out-as-a-unit effect, and — under paragraph (d)(2) — a dedicated UIT buy-in framework with comparable-securities substitution or seller-bears-adverse-price-movement repurchase options; FINRA Rule 11810(e) establishes notice expiration and — critically — cancels pending buy-ins for reconfirmation-eligible securities during a FINRA Rule 11190 reconfirmation and pricing period; FINRA Rule 11810(f) incorporates FINRA Rule 11350's odd-lot exception verbatim for the buyer's continuing acceptance obligation; FINRA Rule 11810(g) mandates a seven-calendar-day extension (with a possible Committee-granted further seven days) for securities in transfer, transit, shipment, or due from a depository; FINRA Rule 11810(h) establishes detailed same-day/next-day notification and payment timelines for executed buy-ins; FINRA Rule 11810(i) establishes UPC Committee and exchange authority for immediate close-outs without prior notice in insolvency-type situations; FINRA Rule 11810(j) establishes the Liability Notice alternative for warrants, rights, convertibles, and expiring instruments, preserving a damages claim without requiring an immediate buy-in; FINRA Rule 11810(k) governs cash and guaranteed-delivery contract buy-ins on a compressed, next-day-without-notice timeline; FINRA Rule 11810(l) requires a dedicated, adequately staffed buy-in desk; and FINRA Rule 11810(m) deems accrued stock, rights, or warrants due on the payable date, subjecting undelivered amounts to buy-in. The rule was most recently amended September 5, 2017 through SR-FINRA-2016-047, with an extensive amendment history extending to 1968 and fourteen selected notices: 73-39, 82-34, 83-6, 83-69, 84-68, 86-59, 89-44, 89-56, 90-15, 93-17, 96-8, 08-06, 10-49, and 17-19.
