OATS Report - August 28, 2002
August 28, 2002
NASD plans to implement its next regular quarterly release for the third quarter of 2002 (2002.3) into the testing environment on September 30, 2002 and into the production environment on October 14, 2002. This release contains a variety of changes, some requiring coding by members and some that enhance functionality.
The 2002.3 release includes the following enhancements that may require changes to firm system codes.
1. Market Center Code
On July 24, 2002, the SEC approved amendments to NASD rules that establish, implement, and operate NASD's Alternative Display Facility (ADF) on a pilot basis (NASD Notice to Members 02-45). In this regard, NASD Rule 6954 has been amended to require that when a Reporting Member executes an order, in whole or part, the Reporting Member shall report the national securities exchange or facility operated by a registered securities association where the trade was reported, Therefore, a new mandatory Market Center Code is being added to the OATS Execution and Combined Order/Execution Report.
Valid codes include:
- Q (Nasdaq)
- D (ADF)
- C (Cincinnati Stock Exchange)
- A (American Stock Exchange)
- M (Chicago Stock Exchange)
As stated in NASD Notice to Members 02-45, firms will be required to begin identifying the market center where the order execution was reported beginning September 27, 2002. However, in order to coincide with the regularly scheduled third quarter 2002 OATS release (OATS Release 2002.3), firms will not be required to record or submit this information to the OATS production environment until October 14, 2002. Firms may begin testing their systems in the OATS Testing Environment beginning on September 30, 2002, but should not submit any Execution Reports or Combined Order/Execution Reports to the OATS production environment until October 14, 2002.
2. Enhanced Validations
NASD is tightening its validations specifically related to the combination of Received Method Code, Account Type Code, Routing Firm MPID and Routed Order ID on the New Order, Cancel/Replace, Combined Order/Execution and Combined Order/Route reports. The validations follow:
| Received Method Code | Account Type Code | Routing Firm MPID | Routed Order ID | Comments |
|---|---|---|---|---|
| E (Electronic) | W (Wholesale) | Required | Required | Routing Firm MPID must be valid |
| N (Non-electronic, non-ECN) | W (Wholesale) | Required | Optional | Routing Firm MPID must be valid |
| C (ECN) | W (Wholesale) | Required | Optional | Routing Firm MPID must be valid |
| M (Non-Member Firm) | W (Wholesale) | Optional | Null | If Routing Firm MPID is populated it must be a non-member firm or event will be rejected. |
| X (Not known) | W (Wholesale) | Null | Null | X is not an accepted value for wholesale orders and therefore this combination will be rejected. |
| E (Electronic) | R (Retail) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| N (Non-electronic, non-ECN) | R (Retail) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| C (ECN) | R (Retail) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| M (Non-Member Firm) | R (Retail) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| X (Not known) | R (Retail) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| E (Electronic) | P (Proprietary) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| N (Non-electronic, non-ECN) | P (Proprietary) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| C (ECN) | P (Proprietary) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| M (Non-Member Firm) | P (Proprietary) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| X (Not known) | P (Proprietary) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| E (Electronic) | P (Proprietary) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| N (Non-electronic, non-ECN) | E (Employee) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| C (ECN) | E (Employee) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| M (Non-Member Firm) | E (Employee) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| X (Not known) | E (Employee) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| E (Electronic) | C (Combined) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| N (Non-electronic, non-ECN) | C (Combined) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| C (ECN) | C (Combined) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| M (Non-Member Firm) | C (Combined) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
| X (Not known) | C (Combined) | Null | Null | Routing Firm MPID and Routed Order ID must be blank. |
3. OATS Contact Email Address
If an OATS Contact is updated on the OATS Web interface, the e-mail address must be populated and contain an @ and a domain name or the contact will not be recorded.
4. Special Handling Code
One new special handling code of TS will be added:
- Trailing Stop order is TS.
- A Trailing Stop Order is defined as follows: In the case of a sell order, a Trailing Stop Order allows the stop price to increase by a predetermined amount or formula (e.g., a specified dollar amount, a percentage of the market price, or some other predetermined criteria) as the market price of the security advances. In the case of a buy order, a Trailing Stop Order allows the stop price to decrease by a predetermined amount or formula (e.g., a specified dollar amount, a percentage of the market price, or some other predetermined criteria) as the market price of the security declines. Once the Trailing Stop price is triggered, the buy or sell order becomes either an executable market order or a limit order (i.e., a Trailing Stop Limit Order).
Questions regarding this topic or on OATS in general may be directed to the OATS Help Desk at (800) 321-NASD.