FINRA Rule 6860

This "up to nanoseconds" ceiling reflects the practical limit CAT's own infrastructure was built to accommodate; a firm's systems capturing time even more precisely than nanoseconds do not get to report at that even-finer level indefinitely, a limitation addressed through the truncation provision discussed next.

The Truncation Requirement and Its 2025 Extension

Where an Industry Member's systems capture time stamps in increments more granular than nanoseconds, meaning finer than a billionth of a second, that Industry Member must truncate the time stamp after the nanosecond level for CAT submission purposes, rather than rounding the value up or down to the nearest nanosecond. This truncation-not-rounding distinction is a deliberate technical choice: rounding could shift a reported timestamp either earlier or later than the true underlying event time depending on which direction the rounding happened to go, while truncation simply drops the sub-nanosecond digits, always reporting a timestamp that is accurate up to, but never later than, the true event time.

This truncation relief traces back to a 2020 exemptive request. The CAT NMS Plan Participants requested exemptive relief from the SEC on February 3, 2020, seeking permission to require truncation rather than rounding for firms whose systems exceed nanosecond precision, and the SEC granted that relief on April 8, 2020. FINRA implemented the resulting standard into Rule 6860(a)(2) through SR-FINRA-2020-018, filed and made effective per Securities Exchange Act Release No. 89119, and the original relief was set to expire April 8, 2025, five years from the date it was granted, establishing the recurring five-year renewal pattern that has since continued.

As that expiration date approached, the Participants filed a request on March 24, 2025 seeking a further five-year extension, and the SEC granted this extension, known as the 2025 Timestamp Granularity Exemption, on May 2, 2025, in Securities Exchange Act Release No. 102980, 90 FR 19334. FINRA then filed SR-FINRA-2025-012 on July 17, 2025, published in the Federal Register on July 22, 2025, formally amending Rule 6860(a)(2) to replace the April 8, 2025 expiration reference with April 8, 2030, extending the truncation standard's availability by a full additional five years. FINRA requested, and the SEC granted, a waiver of the standard 30-day operative delay, meaning this extension took effect immediately upon filing rather than after the ordinary implementation runway, avoiding any gap between the original relief's expiration and the extended relief's effectiveness.

Candidates and practitioners should understand this amendment for what it actually is: a straightforward extension of existing relief rather than any substantive change to the underlying truncation methodology itself. FINRA's own filing characterized the amendment as maintaining a standard that had already been in place for five years, consistent with the newly granted 2025 Timestamp Granularity Exemption, rather than introducing any new obligation or altering how firms should actually be truncating their timestamps in practice.

The Manual Order Event Accommodation

Paragraph (b) provides a materially different, looser standard for Manual Order Events specifically. Each Industry Member may record and report Manual Order Events to the Central Repository in increments up to and including one second, recognizing that a non-electronic communication of order-related information, by its nature, cannot realistically be timed with the same millisecond or finer precision available to a fully automated, electronically captured event. A human relaying order instructions verbally, or recording a paper ticket, is not capable of the same timing precision a computer system captures automatically, and Rule 6860 accommodates that practical reality rather than imposing an unachievable precision standard on manual activity.

This accommodation comes with an important qualification, however: even though the underlying Manual Order Event itself may be recorded and reported at one-second granularity, each Industry Member must still record and report, in milliseconds, the specific moment that Manual Order Event was captured electronically in the firm's own order handling and execution system, a moment Rule 6860 defines as the "Electronic Capture Time." This creates a genuinely two-tiered timing structure for manual activity: the inherently imprecise human-originated moment gets the looser one-second treatment, while the machine-generated moment when that manual information actually entered the firm's electronic systems gets the same millisecond precision applied to fully electronic events.

Why the Two-Tier Structure Makes Sense

This distinction reflects a coherent underlying logic once understood properly. CAT cannot demand more precision from a human-originated event than a human is actually capable of producing, so the underlying Manual Order Event's own timestamp is permitted the more forgiving one-second granularity. But the Electronic Capture Time is not a human-generated timestamp at all; it is generated automatically by the firm's own computer system at the moment that system actually receives and records the manual information, a purely machine-driven event capable of the same millisecond precision any other electronically captured event can achieve. Rule 6860 therefore holds this second timestamp to the higher standard, since there is no practical reason to relax precision for a timestamp a computer system generates automatically regardless of how imprecise the underlying human-originated event that triggered it might have been.

A firm's compliance program should understand that these are genuinely two separate data points serving two different analytical purposes for CAT, not a single timestamp reported twice at different precision levels. The Manual Order Event's own one-second timestamp reflects, as best as can practically be determined, when the underlying manual communication actually occurred; the Electronic Capture Time reflects when that communication was translated into the firm's electronic systems, a potentially later moment that itself carries analytical significance for reconstructing how quickly a firm processes manually received order information.

How Rule 6860 Relates to Rule 6820

Candidates and practitioners should understand precisely how Rule 6860's granularity standard interacts with, but remains conceptually distinct from, Rule 6820's clock synchronization standard covered elsewhere in this dictionary. Rule 6820 addresses accuracy: how close a firm's Business Clock must remain to the true NIST atomic clock time, measured in a tolerance of fifty milliseconds for most systems. Rule 6860 addresses precision: how finely that clock's output must be sliced and reported once an event occurs, measured in whatever increment the firm's own systems are actually capable of capturing, up to nanoseconds.

These are genuinely independent dimensions of timekeeping quality, and a firm can satisfy one without automatically satisfying the other. A system could, in principle, capture time with extremely fine nanosecond precision while nonetheless drifting outside the fifty-millisecond accuracy tolerance Rule 6820 requires, reporting a very precisely stated but nonetheless inaccurate timestamp, precision without accuracy. Conversely, a system could remain perfectly synchronized within Rule 6820's accuracy tolerance while only capturing time at a coarser granularity than its own underlying capability would technically allow, satisfying Rule 6820 while potentially falling short of what Rule 6860 requires if the system is in fact capable of finer-grained reporting than it is actually configured to produce, accuracy without full precision. A firm's compliance program needs to verify both dimensions independently rather than assuming that satisfying one rule automatically demonstrates compliance with the other.

A Worked Example of the Manual Order Event Distinction

Consider a retail brokerage representative who receives a customer's order instruction over the telephone at approximately 10:15:22 a.m., a moment a human representative can only estimate to the nearest second at best, consistent with the one-second granularity Rule 6860(b) permits for the Manual Order Event itself. The representative then enters that order into the firm's order management system, an action the system itself timestamps automatically and precisely, perhaps recording that entry at 10:15:47.328 a.m. Eastern Time, reflecting the actual delay between the phone call and the representative's data entry into the electronic system, a delay that might arise from the representative confirming order details, checking account status, or simply the mechanical process of typing the order into the system's entry fields.

Under Rule 6860, the firm reports two distinct data points to CAT for this single order: the Manual Order Event's own time, reported at one-second granularity as approximately 10:15:22 a.m., reflecting the representative's best estimate of when the customer instruction actually occurred, and the Electronic Capture Time, reported in milliseconds as 10:15:47.328 a.m., reflecting the precise, machine-recorded moment that instruction was actually entered into the firm's electronic order handling system. This twenty-five second gap between the two timestamps is not an error or inconsistency; it is exactly the kind of information CAT is designed to capture, since it reveals the actual elapsed time between a customer's verbal instruction and that instruction's translation into the firm's electronic order handling infrastructure, information regulators may find relevant when reconstructing how quickly a firm processes manually received orders during ordinary operations or during periods of unusually high call volume.

Relevance Across FINRA's Exam Programs

The SIE, Series 63, and Series 65 do not test Rule 6860's timestamp granularity mechanics, since these exams do not reach into CAT's technical reporting infrastructure at this level of detail. A Series 7 candidate is unlikely to encounter this rule directly, though a general awareness that CAT reporting demands increasingly precise timing as market technology has evolved provides useful context for understanding why FINRA's technology rules continue to be refined over time.

A Series 24 candidate supervising order handling operations, particularly at a firm that still processes meaningful manual order flow alongside electronic trading, needs genuine command of the two-tier Manual Order Event structure, since a principal's supervisory procedures should specifically confirm that the firm's systems correctly distinguish between the permitted one-second Manual Order Event timestamp and the required millisecond Electronic Capture Time, rather than mistakenly applying the looser standard to both data points. A Series 57 candidate working with high-frequency or algorithmic systems capturing time more precisely than nanoseconds should understand the truncation, not rounding, requirement precisely, since a system that rounds sub-nanosecond timing rather than truncating it produces technically inaccurate CAT submissions even where the underlying timing itself was captured correctly.

Practical Guidance for Firms

Firms whose systems capture time more granularly than nanoseconds should specifically verify their CAT reporting infrastructure implements true truncation logic, dropping sub-nanosecond digits entirely, rather than any form of rounding, however seemingly minor the rounding behavior might appear to a developer implementing the underlying reporting logic. Given how easily a rounding function can be implemented inadvertently in place of a truncation function during system development, particularly since the two produce identical results the overwhelming majority of the time and only diverge in specific edge cases, firms should include a dedicated test case in their CAT reporting quality assurance process that specifically validates truncation behavior at values where rounding and truncation would actually produce different results, ensuring this distinction is caught during testing rather than discovered only through a live reporting discrepancy.

Firms with meaningful manual order flow should build explicit, separate handling logic for the Manual Order Event timestamp and the Electronic Capture Time, rather than allowing a single timestamp value to populate both fields by default. A firm's order management system should be specifically configured to capture the Electronic Capture Time as its own independent, millisecond-precision data point generated automatically at the moment manual information enters the system, distinct from whatever coarser timestamp the firm's staff might record or estimate for the underlying manual communication itself.

Given that the 2025 truncation extension runs only through April 8, 2030, firms should treat this as a standing item for renewed regulatory monitoring as that date approaches, rather than assuming the current relief will simply continue indefinitely without further action. The pattern established across the 2020 and 2025 extensions, a five-year exemptive relief period followed by a renewed Participant request as expiration approaches, suggests firms should expect a similar renewal cycle to recur as the 2030 date nears, and should not be caught by surprise if FINRA's Rule 6860 language once again requires a corresponding amendment at that time.

Firms should also periodically audit their own systems to confirm the granularity at which each system genuinely captures time internally, rather than relying on outdated documentation or assumptions about system capability that may no longer reflect actual current infrastructure. A firm that upgrades a trading or order management system, whether through an internal development effort or a vendor platform migration, may find that the new system's native timing precision differs from its predecessor's, potentially triggering a corresponding change in the firm's Rule 6860 reporting obligations that would not be apparent without an active review of the new system's actual technical capabilities. Firms that assume their timestamp granularity obligations remain static over time, without periodically reconfirming what their current technology stack actually captures, risk inadvertently under-reporting granularity their systems are now capable of providing, a compliance gap that can develop gradually and silently as underlying technology evolves.

Firms should also build cross-functional coordination between their technology teams, who understand the actual precision their systems capture, and their compliance teams, who understand the regulatory reporting obligations tied to that precision, since a disconnect between these two functions is a common source of Rule 6860 compliance gaps. A technology team implementing a new system upgrade without awareness of the corresponding CAT reporting implications, or a compliance team unaware that a recent infrastructure change has altered the firm's actual timing capability, can each independently create a situation where the firm's actual reported granularity no longer matches what its systems are genuinely capable of producing, an outcome neither team would catch working in isolation from the other.