OATS Frequently Asked Question Archive
C2. My firm does not trade or handle orders in Nasdaq securities on behalf of customers. We only trade NYSE– and Amex–listed securities. Does my firm have reporting responsibility?
Your firm would not have OATS reporting responsibility, unless you originate proprietary orders in Nasdaq or OTC listed securities and you are not trading in the normal course of market making activities. OATS reporting only applies to the receipt or origination of orders for Nasdaq and OTC listed securities. (Last updated 04/08/09)
C7. When will I need to start reporting orders to OATS?
As of March 1, 1999, all electronic orders received at the trading desk by market makers or Electronic Communication Networks (ECNs) were required to be recorded and retained.
As of August 1, 1999, all electronic orders were required to be reported to OATS. There is currently a rule proposal on file with the SEC which would require all orders to be reported to OATS, including all non-electronic, or manual, orders (referred to as OATS Phase 3). Phase 3 will become effective within 120 days after SEC approval at which time, all firms will be required to begin maintained OATS data for manual orders. Each firm registered to begin reporting in Phase 3 will then be assigned a Reporting Date by FINRA at which time they will be required to report to OATS all applicable order events.
Firms may report all data elements and all orders for Nasdaq securities and are not required to wait until Phase Phase 3 to report order information. However, any data reported to OATS must be complete and accurate or may constitute a violation of the OATS Rules.
The Subscriber Initiation and Registration Forms are available for firms and third parties that will be reporting in Phase 3. Registration must be completed approximately 120 days before the appropriate Implementation Date. In addition, any firm or third party that has not registered and that will be reporting to OATS before Phase 3 should use this Form to register. Members that are required to report the Form and fail to complete it and return it will be unable to report OATS data to FINRA; failure to report order information is a violation of NASD Rules 6955 and 2110.
Firms and third parties must register in order to transmit to OATS. In addition, firms must register in order to see file status, record rejections, and statistics for any data submitted on their behalf. (Last updated 06/13/02)
C22. I am a market maker. How do I know if I should be reporting in Phase 1, Phase 2, or Phase 3?
According to the OATS Rules, all market makers and electronic communication networks that receive electronic orders at the trading desk are required to report to OATS starting in Phase 1 (March 1, 1999). Thus, depending on the type of orders they receive, some market makers are not required to report to OATS until Phase 3. Below are some guidelines to consider when determining the phase when you should begin reporting:
Orders Not Covered by OATS Rules
If you meet any of the requirements for Phase 1 reporting, you must begin sending data to OATS in Phase 1. Even if you begin reporting to OATS in Phase 1, you may wait until Phase 3 to send data that is not required until Phase 3 (e.g., New Order Reports for orders received and handled in a manual way).
If you have already registered for OATS by returning the Subscriber Initiation and Registration Form, but you determine that you are not registered to begin reporting in the proper phase, you must submit a revised Subscriber Initiation and Registration Form to change your status.
If you have not already registered for OATS, you must register using the revised Subscriber Initiation and Registration Form. Complete the Form and fax or mail it to Business and Technology Support Services. The fax number is 240-386-4841. The address is 9509 Key West Avenue, Rockville, MD 20850. You must register at least 120 days prior to your OATS Implementation Date (for Phase 2, April 1, 1999; for Phase 3, it is yet to be determined). NOTE: NASD member firms that fail to complete and return this Form will not be able to report OATS data to NASD; failure to report order information by the specified OATS Reporting Date is in violation of NASD Rules 6955 and 2110.
Member firms that will be using one or more third parties to report OATS data should ensure that all third parties register with OATS. Only registered entities can transmit to OATS. See C7. (Last updated 06/13/02)
C23. I am a market maker. I currently process all orders using order tickets and the telephone; however, I am planning to install an electronic order routing and trading system. Am I required to report to OATS in Phase 1?
If you currently have no electronic order routing or trading system, but you plan to begin using an electronic order routing or trading system, contact the FINRA Business and Technology Support Services to determine when you will be required to report. Remember that you must file a revised Subscriber Initiation and Registration Form for the proper reporting phase if any change in your firm’s business practices causes you to meet the reporting criteria for a phase other than the one on your original registration form. (Last updated 05/07/99)
C25. During Phase 1, do I need to report orders I receive via the telephone and enter into an electronic order handling or execution system?
During Phase 1, all orders for Nasdaq securities that a market maker receives—including orders received via the telephone, conversation, and e-mail—that are entered into an electronic order handling or execution system and transmitted to the trading desk must be reported to OATS. In addition, any other orders that a market maker receives at the trading desk via an electronic order handling system must be reported to OATS. (Last updated 11/03/98)
C29. Are my reporting responsibilities different if I use a member firm's electronic order handling or execution system versus a non-member firm's system?
Yes. For non-market makers:
For market makers:
C43. More than one third party is reporting on my behalf. Each has a different Reporting Date. I am assigned the earliest date. All of my order data will not be transmitted to you until the latest date. Will I have a compliance problem as a result of this assignment?
No. FINRA is aware that some member firms have more than one third party reporting on their behalf and that these third parties have different Reporting Dates. Firms are only responsible to report all of their order data to OATS at the time the last third party begins reporting. In order to keep FINRA informed about such situations, member firms must file a revised Subscriber Initiation and Registration Form if there are any changes to the third parties that will be reporting on their behalf. (Last updated 05/07/99)
C44. The third party that is transmitting for us is submitting order data on our behalf before our Reporting Date. Are we responsible to repair the rejected records submitted prior to our Reporting Date?
Yes. You are required to repair any records submitted to the production environment prior to your reporting date. All order information received via the production environment will be utilized by FINRA in the normal course of surveillance activities therefore, there must be a reasonable expectation that information reported to the production database is correct. Also, firms reporting early should work with their third-party vendors to eliminate the rejections, when possible, or develop the means to repair the rejections, when necessary. (Last updated 12/15/99)
C45. We are an ECN. Some of the orders we receive from member firms are executed via SelectNet. Which order reports are we required to report to OATS?
If the ECN’s quote is being accessed by another market participant through SelectNet, the ECN would be required to record and report a New Order Report and an Execution Report for any resulting executions. If the ECN sends a SelectNet order to another market participant, the ECN would be required to record and report a New Order Report and a Route Report when the order was sent to SelectNet for execution. (Last updated 06/13/02)
C46. Sometimes when we place orders on a Nasdaq Execution System, the orders are not fully executed. Subsequently, we resubmit the order for the remaining quantity. (For example, the original order is for 1,000 shares. We place an order on SOES. We receive an execution for 200 shares. Subsequently, we place an order on SOES for the remaining 800 shares and receive an execution.) How would we report these order events to OATS?
In the scenario you describe, you would need to create a New Order Report for the initial order of 1,000 shares, a Routing Report for the route of 1,000 shares, and another Routing Report for the route of 800 shares. There is no "Cancel Route" report in OATS to indicate that that part of the initial route had to be rerouted. (Last updated 06/13/02)
C49. Sometimes we receive phone orders at the trading desk that are immediately executed electronically. (The order is never placed in our electronic order handling system.) We usually create a paper ticket for the order after execution. How do we handle OATS reporting?
Firms that make executions based on oral orders without an order ticket are required to create both a New Order Report and an Execution Report. Because the order was executed electronically, it is considered an electronic order and it must be reported in Phase 1 or 2, as appropriate. See C7, C22 and C29. (Last updated 05/13/99)
C58. When I receive an order from another firm, am I required to include the Routing Firm MPID when reporting in Phase 1 even though route reports are not required to be reported until Phase 2?
Yes. A Routing Firm MPID must be reported in Phase 1 if an order was received from another member firm. ECNs are required to include this value for all orders received from NASD members. The Routing Firm MPID must be a valid MPID for the Order Received Date. (Last updated 06/04/99)
C60. Does my firm have an obligation to report orders placed on OptiMark to OATS?
If your firm places an order into OptiMark for a customer or another member, then your firm must send a New Order Report and a Route Report with a Routing Method Code of "O". If a sponsored non-member enters an order directly into OptiMark or if the member originates an order in the normal course of market making, the order is not OATS reportable. See T41. (Last updated 08/04/99)
C61: Our firm is preparing for decimalization with a systematic process to convert open limit and stop limit orders from fractions to decimals. Do we need to provide OATS with any of these modifications?
Members who will systematically convert their order handling systems from fractions to decimals will not be required to report the conversion price change to OATS. But, members must file a Cancel/Replace Report to reflect the price adjustment if their systems automatically generate a New Order ID for any such modification. (Last updated 12/04/00)
C65: Q.When appending a Prior Reference Price (PRP) modifier to an ACT trade report we report the PRP time as the time of execution. What execution time should be reported to OATS, the actual time of execution or the PRP time?
A. When reporting an execution for a PRP to OATS, firms should report the PRP time as the execution timestamp on the OATS execution report. (Last updated 04/12/01)
C66. If I electronically route an order to a NASDAQ Execution System ("NES") such as SOES, SelectNet, SuperSOES or SuperMontage and that order is immediately rejected, am I required to report an OATS Route Report for the rejected order?
No. If you electronically route an order to an NES and that order is immediately rejected (i.e. it is not accepted by the NES and therefore not presented to any market participants in the NES), then the firm is not required to report the route in an OATS Route Report. However, if the firm re-transmits that order to the NES and the re-transmitted order is accepted, a Route Report must be recorded and reported to OATS. (Last updated 11/26/02)
T12. What are the OATS registration procedures?
All market makers and ECNs that are required to record and report order data to OATS in any phase of OATS and firms required to report in Phase 2 should have returned the Subscriber Initiation and Registration Form to FINRA. In addition, third-parties that will be reporting order information on behalf of members must also register.
Phase 3 firms are required to register using the OATS Subscriber Initiation and Registration Form approximately 120 days prior to their OATS Reporting Date. When Phase 3 commences all members that handle manual orders in NASDAQ securities will be required to report. Completed registration forms should be accompanied by a request for a User ID and password and be faxed or mailed to Business and Technology Support Services, 9509 Key West Avenue, Rockville, MD 20854, Fax: 240-386-4841.
FINRA member firms that handle orders in NASDAQ securities and fail to register for OATS will not be able to report OATS data to FINRA; failure to report order information by the specified OATS Reporting Date is in violation of NASD Rules 6955 and 2110.
Firms and third parties must register in order to transmit to OATS. In addition, firms must register in order to see file status, record rejections, and statistics for any data submitted on their behalf. (Last updated 05/07/99)
T29. How can I get a copy of the OATS Subscriber Manual?
T30. Are we allowed to report manual orders during Phase 1 or 2, or are we required to wait until Phase 3 to report these orders?
OSOs may record all of the order data required under the OATS Rules beginning March 1, 1999; they are not required to wait until Phase 3 to record data about manual orders. OSOs may submit all order data that they record beginning the day they are assigned by FINRA to report to OATS. All entities that will be reporting to OATS directly or through another party must register via the Subscriber Initiation and Registration Form based on requirements set therein, prior to their Implementation Date. (Last updated 12/04/00)
T36. When did the changes to the rules for trade reporting to ACT take effect?
Amendments to NASD Rules 6120, 6130, 4632, and 4642 (ACT Rules) were filed with the SEC on August 11, 1998 (SR-NASD-98-60). They were approved September 14, 1998. The changes become effective at the same time as OATS reporting—March 1, 1999, for orders received electronically at the trading desk of market makers and ECNs; August 1, 1999, for all electronic orders; and October 31, 2000, for non-electronic (manual) orders.
These amendments included the requirement to report execution time in hours, minutes, and seconds for OATS reportable securities regardless of the difference between the time of execution and the actual time of the trade report to ACT; the requirement to include an Order ID (Branch/Sequence Number) on the trade report for all OATS reportable securities*; and the requirement that each member firm that receives or handles orders in OATS reportable securities obtain a market participant ID (MP ID). Click here to read these amendments.
* NOTE: Entry of the Branch/Sequence number into ACT is not subject to the 90-second reporting rule. (Last updated 05/16/00)
T41. How has the current edition of the OATS Reporting Technical Specifications changed from previous edition?
The latest edition of the OATS Reporting Technical Specifications was published May 4, 1999. It introduced several significant changes, including the ones listed below, which will take effect with the next release of OATS (expected to be in June 1999). (For a complete list of changes, click on the link above.)
(Last updated 05/07/99)
T50. What software can I use to submit e-mail to OATS? You must use a 128-bit encrypted (domestic) version of Netscape Communicator 4.5 (or above) or Outlook 98/Outlook Express (or above) to transmit to OATS via e-mail. For additional information, refer to the OATS Subscriber Manual . (Last updated 02/16/99)
T50. What will my User ID and Password be in the OATS Production Environment?
If you are reporting to OATS in Phase 1 and you had a password in the OATS testing environment before the last week of February 1999, your User ID and Password were the same in the OATS production environment as in the testing environment. Afterwards, any password changes you made in the production environment affected only the production environment and any changes you made in the testing environment affected only the OATS testing environment. OATS does not require you to have the same password in testing as in production. (It is recommended that the two passwords remain different in order to safeguard against transmitting to the wrong environment.)
If you do not already have a User ID and Password for OATS, you will be issued a User ID and password for the testing and production environments upon registration and request for an initial user account. (Last updated 05/07/99)
T51. Can I use Microsoft Exchange to submit email to OATS?
No. For security reasons, you must use a 128-bit encrypted (domestic) version of Netscape Communicator or Outlook/Outlook Express (or above) to transmit to OATS via email. (Last updated 03/30/09)
T54. When can I request my certificate to send e-mail to the OATS Production Environment?
Beginning March 1, 1999, you can request your certificate for reporting to the OATS production environment via e-mail. Refer to the OATS Subscriber Manual for additional information about transmitting to OATS via e-mail. (Last updated 02/16/99)
T56. How can I get a list of NASDAQ convertible bonds?
Nasdaq Trading and Market Services (301-978-5313) can provide a list of NASDAQ convertible bonds. There is a $25 service fee. Turnaround time is usually one to two business days. The list must be updated daily to remain accurate. It is possible to update the list by referring to www.nasdaqtrader.com and clicking on the Daily List. (Last updated )
T58. My firm receives an order for 10,000 shares. We send 10 routes of 1,000 shares each to SelectNet within the same second. Can we use the same Routed Order ID for these routes?
No. Firms must use a unique Routed Order ID for each route to the same firm within the same second. Otherwise, the Routed Order ID is not required to be unique. (Last updated 05/07/99)
T60. I tried to put an 8-character alphanumeric branch/sequence number into my ACT trade report, but it was rejected from ACT. Why?
First generation CTCI will not accept a 1 to 8 character branch/sequence number. You must use second generation CTCI to use a 1 to 8 character branch/sequence number. For additional information, contact Nasdaq Market Operations Trading Services at (800) 219-4861 or the ACT Operations Desk at (203) 378-0166. First generation CTCI is being phased out on June 30, 1999. (Last updated 05/07/99)
T63. I use e-mail for reporting to OATS. Why is my user account locked?
If you do not use 128-bit encryption for your e-mail message, OATS will automatically disable the sender’s User ID. If OATS receives an e-mail message that does not use 128-bit encryption and no User ID can be identified, it will ignore the message. See the OATS Subscriber Manual for additional information. (Last updated 05/07/99)
T72. Which version of Netscape am I required to use to submit to OATS via e-mail?
Firms that want to send FOREs via e-mail must use Netscape Communicator 4.5. For additional information, refer to page 1-13 in the OATS Subscriber Manual . Netscape Communicator 4.5 is the name given to a suite of tools that include the Netscape Navigator 4.07 browser and Netscape Messenger 4.5 mail client. Versions of Netscape Communicator before 4.5 did not offer the required 128-bit encryption. (Last updated 05/07/99)
T80: If my firm has chosen to populate the extended Firm Order Received Date field with the time. What do we enter in that field for subsequent order events (i.e. Cancels, Cancel/Replaces, Executions, etc.) for orders that existed prior to May 7, 2001, the date the extended field went into production?
The extended Order Received Date field should be populated with "0" (zeros) for subsequent order events that relate to orders that existed prior to the May 7, 2001 production date. For example, the firm has a GTC limit order that was received on May 3, 2001. This order would have been reported to OATS with the Firm Order Received Date of "20010503" (i.e. YYYYMMDD). When the order was executed on May 8, 2001, the Firm Order Received Date on the OATS Execution Report would need to be designated as "20010503000000" (i.e. YYYYMMDDHHMMSS) when reporting it to OATS. The zero filled HHMMSS extended field is necessary since OATS did not originally receive the time. (Last updated 05/10/01)
P5. What Version Description should be used when submitting files after January 18, 1999?
Beginning January 19, 1999, files submitted to OATS must contain Version Description OATS D1999-01. Also, beginning on this date, all files and records submitted to OATS must contain all of the changes described in the latest edition of the OATS Reporting Technical Specifications. The most recent additions is dated October 9, 2000. (Last updated 12/04/00)
P6. If we receive an order at our Institutional Desk, it is transmitted to the Portfolio Desk, and then it is transmitted to the Trading Desk and executed, what reports are required?
The following reports would be required: New Order Report (indicating the time the order was received by the Institutional Desk and entered into the electronic order handling system), a Desk Report (indicating that the order was transmitted from the Institutional Desk to the Portfolio Desk), and an Execution Report (one report is required for each execution if there are partial executions). If the orders were transmitted directly from the Institutional Desk to the Trading Desk, no Desk Report would be required. (Last updated 03/30/09)
P13. I do not receive any orders from retail customers via electronic order routing systems. All of my retail customer orders are received via e-mail, mail, or the telephone. After I receive an order, I capture it in an electronic order routing system. What should I indicate in Received Method Code?
Received Method Code is only required for wholesale orders (orders received from another firm); but it should be provided to the extent it is available for other types of orders (e.g., retail). Received Method Code should be used to indicate the method of order receipt (e.g., via an electronic order handling system or via the telephone); not the method of order capture (e.g., captured in an electronic order handling system or on a paper order ticket). (NOTE: The definition of Received Method Code in the Data Dictionary of the OATS Reporting Technical Specifications has changed. This code should indicate whether the order was received electronically or non-electronically by a member firm or an ECN (not whether it was captured electronically or non-electronically). Beginning with the next release of OATS, a new code "X" has been added to indicate "Not known." (This code is not an acceptable value for wholesale orders.) Until the next release of OATS, you must use one of the current Permitted Values, regardless of the Account Type. (Use the code that most nearly fits the situation.) See T64. (Last updated 05/07/99)
P14. What is the appropriate Routing Method Code to report for for orders routed to SuperSOES?
Firms routing orders via SuperSOES should report "O" as the Routing Method Code on the OATS Route Report. (Last updated 06/13/02)
P15. If you are a FINRA member currently submitting OATs information for orders routed to SuperMontage, INET and Brut, what changes are required, if any, when Nasdaq becomes an exchange?
There will be no OATS reporting changes for orders routed to SuperMontage, INET and BRUT upon Nasdaq becoming an exchange. Firms must continue to record and report to OATS a Route Report for each order sent to these destinations and provide the appropriate Destination Code of "U" for SuperMontage or "E" for BRUT and INET. (Last updated 4/5/06)
S1. When will I need to start synchronizing my clocks?
NASD Rule 6953 applies to all member firms that record order, transaction, or related data required by the By-Laws or other FINRA rules. It requires member firms to synchronize all business clocks, including both computer system clocks and mechanical time stamping devices. According to Rule 6957(a), the requirements of this Rule are effective on August 7, 1998, for all computer system clocks and on July 1, 1999, for all mechanical clocks. Click here to read or download NASD Rules 6950 through 6957. (Last updated 06/13/02)
S4. If I process some orders in my firm manually and some orders in my firm electronically, by what date should my business clocks be synchronized?
The requirements of this Rule remain the same, even if you process orders both electronically and manually in your firm. They are effective on August 7, 1998, for all computer system clocks and on July 1, 1999, for all mechanical clocks. (Last updated 07/06/98)
S10. We want to buy mechanical time clocks that record the date and time in compliance with the OATS Rules. Can you provide us with a list of vendors?
FINRA is aware of several manufacturers of mechanical time clocks that claim their clocks can record the date and time in hours, minutes, and seconds and can be synchronized as FINRA prescribes in the OATS Rules and in the OATS Reporting Technical Specifications. Many vendors distribute these and other clocks. Contact the FINRA Business and Technology Support Services to obtain a list of the known manufacturers.
Note: FINRA does not recommend or endorse any manufacturer, vendor, or product, nor will it receive any consideration as a result of providing the information about any such manufacturer or vendor. When the Association becomes aware of any other manufacturers of mechanical time stamp machines that claim they meet the requirements of OATS Rule 7430, they will be added to the list maintained by FINRA Business and Technology Support Services. (Last updated 3/30/09)
S11. We would like to buy an inexpensive desk or wall clock that can be synchronized in compliance with the OATS Rules because we have very few manual orders. Can you provide us with a list of vendors?
FINRA is aware of several manufacturers of clocks that can be synchronized as FINRA prescribes in the OATS Rules and in the OATS Reporting Technical Specifications. Many vendors distribute these and other clocks. Contact the FINRA Business and Technology Support Services to obtain a list of the manufacturers.
Note: FINRA does not recommend or endorse any manufacturer, vendor, or product, nor will it receive any consideration as a result of providing the information about any such manufacturer or vendor. When FINRA becomes aware of other manufacturers of clocks that meet the requirements of OATS Rule 7430, they will be added to the list maintained by FINRA Business and Technology Support Services. (Last updated 3/30/09)
D15. What is an Implementation Date?
An Implementation Date is the date under the OATS Rules when firms are required to begin retaining OATS data. The Implementation Dates for Phase 1 and 2 were March 1, 1999 and August 1, 1999, respectively. The Implementation Date for Phase 3 will be 120 days after the rule proposal is approved by the SEC. Firms may be required to transmit this data to OATS beginning on the appropriate Implementation Date or they may be assigned a Reporting Date that is after the appropriate Implementation Date. (Last updated 06/13/02)
D13. What is a Reporting Date?
A Reporting Date is a date assigned by FINRA when a firm must begin transmitting its order data to OATS. If its assigned Reporting Date is after the appropriate Implementation Date , the firm must retain all order data generated between the implementation date and the assigned Reporting Date. However, the firm should not transmit to OATS the data generated between the implementation date and the assigned Reporting Date. (Last updated 05/07/99)
D14. What is an orphan file?
An orphan file is a file submitted to OATS that does not contain enough information in the header to allow OATS to identify the Transmitting OSO. If OATS cannot identify the Transmitting OSO for a file, it cannot provide FORE status information to the proper entity. Such files are only available to FINRA Business and Technology Support Services in order to help Transmitting OSOs resolve file transmission issues. Any Transmitting OSO that does not receive FORE Status information for a file within an hour of the transmission should contact Support Services for assistance. It is possible that the file was processed but was considered an orphan. (Last updated 05/07/99)