OATS Report - November 2, 1999

November 2, 1999

Below is a summary of common data elements that are not being reported correctly to OATS. Failure to report timely, complete, and accurate information to OATS may constitute a violation of NASD Rules 6955 and 2110. Please review the items below, and if you have questions contact Business and Technology Support Services at (800) 321-NASD or via e-mail.

  1. Account Type Code—This data element is fully reportable for all electronic orders by August 1, 1999, and for all manual orders to the extent it is available by July 31, 2000. Many member firms are not providing the Account Type Code in New Order Reports.
  2. Limit Price—Member firms should report the per-share maximum buy price or minimum sell price for a limit order or stop limit order; this is the price at which the customer is protected.
  3. Limit Order Display Indicator—The Limit Order Display Indicator should be the same for orders passed from introducing firms to market makers for further handling or execution. For example, an introducing firm receives an order from a customer with specific instructions not to display the order. The introducing firm routes that order to the market maker for execution. The New Order Reports from both the introducing firm and the market maker should have the Limit Order Display Indicator set to "Y". Y indicates the customer has instructed that a limit order should not be displayed or that a block size order be displayed. The definition of this field is complicated, therefore, member firms should review Appendix A of the OATS Reporting Technical Specifications very carefully.
  4. Optional fields vs. Mandatory fields—In Appendix C of the OATS Reporting Technical Specifications, all data elements required to be reported to OATS are classified as either Optional or Mandatory. For the purposes of OATS, Optional means that under certain circumstances the data element is not required, but in conjunction with other information may be required. Mandatory means the data element must be provided in all instances. For example, the Routed Order ID is listed in the OATS Reporting Technical Specification as Optional; however, the Routed Order ID is required if a routed order is received electronically from another member firm.
  5. Routing Firm MP ID—The Routing Firm MP ID is a data element contained in the New Order Report and is a required field in all wholesale orders received from another NASD member firm. In some instances, member firms have misunderstood the classification of this field as Optional in Appendix C of the OATS Reporting Technical Specifications.
  6. Routed Order ID—In certain situations the routing firm must pass a Routed Order ID to the receiving firm; this ID must also be reported to OATS. The firm routing the order must supply the ID in the Route Report, and the firm receiving the order must supply the ID in the New Order Report.

    If the order was routed electronically to another member, the routing firm must provide the Routed Order ID to the receiving firm and to OATS. Also, if an order is routed electronically to a Nasdaq execution system, (i.e., SOES or SelectNet), the routing firm must provide a Routed Order ID to the execution system using the Branch/Sequence Number in the input format. It is important to note the Routed Order ID sent to OATS by the receiving firm must be identical to the Routed Order ID supplied by the routing firm. For example, the receiving firm may not change the format of the Routed Order ID by adding or deleting preceding zeros or inserting spaces.

  7. Orders Routed to a Nasdaq Execution System (i.e., SOES or SelectNet)—When preferenced orders are placed on a Nasdaq Execution System, the MP ID of the firm to which the preferenced order was sent must be included in the Route Report in the Sent to Firm MPID field.