The tick size pilot program (the "Pilot"), which becomes effective October 3, 2016, requires firms to use the existing Intermarket Sweep Order ("ISO") trade reporting modifier when reporting trades to a FINRA facility that qualifies for the ISO exception to the Trade-at prohibition.
The Pilot consists of three test groups with 400 securities in each and a separate control group. Among other restrictions, securities in the third test group ("Test Group Three") will be subject to a Trade-at prohibition, whereby trading centers will not be permitted to execute an order for a security in Test Group Three at a price equal to a protected bid or protected offer unless an exception applies. One such exception exists for Intermarket Sweep Orders.
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