OATS Report - December 4, 2000

December 4, 2000

Section 4.1.4.3 of the OATS Reporting Technical Specifications, entitled "Order Routing to a Nasdaq Execution System," describes the requirements for recording and reporting the routing of orders to SOES and SelectNet. NASD Regulation would like to reiterate two requirements in this section.

First, Section 4.1.4.3 requires that members must report "…the MPID of the firm to which the order is routed (if any)…". Preferenced orders to SOES or SelectNet, unlike Broadcast Orders, allow for the designation of the MP ID of the firm to which the order is directed. If the order is preferenced to a member firm in SOES or SelectNet, then that MP ID must appear in the "Sent To Firm MPID" field in the OATS Route Report, along with the appropriate "Routing Method Code" ("S" for SOES and "L" for SelectNet).

Second, when "electronically" routing an order to SOES or SelectNet, the firm must provide the "Routed Order ID" to the execution system by using the Branch/Sequence Number field in the message format.

Failure to provide the "Sent To Firm MPID" in these instances is a violation of the recording and reporting requirements of the OATS Rules (NASD Rules 6954 and 6955). Failure to provide the "Routed Order ID" in the SOES or SelectNet message field for an "electronically" routed order also is a violation of OATS Rules. Members are cautioned to review their OATS recording and reporting in this regard.

If you have any questions regarding these issues or on OATS in general please contact Business and Technology Support Services at (800) 321-NASD.