FINRA Clock Synchronization Regulations - Are You in Compliance?

In April 2016, the Securities and Exchange Commission approved a proposed rule change from the Financial Industry Regulatory Authority to tighten rules for clock synchronization at National Market System securities and over-the-counter equity securities firms. It's important for these companies to understand the changes and to have the right Network Time Protocol servers to maintain compliance.

The Effective Changes

Under the new clock synchronization rule, which went into effect in August 2016, NMS and OTC securities firms must synchronize their computer systems to within a drift tolerance of 50 milliseconds of the National Institute of Standards and Technology standard. This is reduced from within one second of the NIST standard. Firms that already record in milliseconds have until Feb. 20, 2017 to comply. However, firms with computer systems that don't record in milliseconds need to comply by Feb. 19, 2018.

FINRA isn't making any other nominal changes to the application or scope of its clock synchronization requirement for other businesses that record the date and time of events. In fact, the new change simply moves a rule from an existing Order Audit Trail System set of regulations to the broader applicable set of rules.

Complying With the FINRA Rule Change

If you operate an NMS or OTC securities firm, you need to ensure that your computer system and NTP server comply with the new FINRA regulation. Masterlock NTP servers are compatible with IPv4 and IPv6 networks, including its NTP100-GPS unit. This is a Stratum 1 NTP server that references GPS satellites to allow for legally traceable time stamping over an Ethernet connection. It synchronizes clocks to within 2 milliseconds of the NIST standard, and provides precision time stamps between 5 and 10 milliseconds.

The NTP100-GPS delivers the same long-term accuracy as the Global Positioning System atomic clocks. It's available with an internal high-stability oscillator to improve holdover stability. Even when GPS connection is lost, the typical holdover stability is plus or minus three seconds per year with an internal temperature-compensated crystal oscillator. An optional oven-controlled crystal oscillator improves holdover stability to plus or minus 250 milliseconds per year. Some other features of the NTP100-GPS include:

  • Stratum 1 NTP accuracy
  • Time stamping legally traceable to UTC
  • MD5 authentication
  • SNMP with custom MIB
  • Configuration via USB or over a network 
  • Adjustable time display brightness
  • NTP query (unicast), multicast, or broadcast modes

The NTP100-GPS also has optional features such as: 

  • 32-channel GPS/GLONASS receiver
  • RM4 rack mount kit
  • 40 dB high-gain antenna
  • 1 PPS output

Click here to request a quote and ensure your business is in compliance.