OATS Frequently Asked Questions - Definitions

D1. What is an electronic order?

An electronic order is an order captured by a member firm in an internal or external electronic order routing or execution system. An order that is not captured in such a system is a non-electronic, or manual, order. NOTE: An electronic order can be routed or executed in a manual way (e.g., via telephone). (Last updated 11/03/98)

 

D2. What is a non-electronic order?

A non-electronic order, or manual order, is an order captured by a member in some way other than in an electronic order routing or execution system, such as on a paper ticket. (Last updated 03/30/09)

 

D3. Describe the different types of OATS Reports.

  • New Order Report-submitted when an order is originated or received by a member firm or ECN. The information reported is from the perspective of the receiving firm and not necessarily the perspective of the firm that initially received or originated the order. Thus, if a market maker received an order from a non-market maker, the market maker’s New Order Report would contain order details provided by the non-market maker, not the original customer. New Order Reports do not disclose the identity of retail customers.
  • Routing Report-submitted when an order is sent from a member firm to another member firm, ECN, Exchange, or non-member for handling or execution
  • Desk Report-submitted when an order moves between desks or departments within a member firm.
  • Execution Report-submitted when an order is fully or partially executed (filled). A separate Execution Report must be submitted for each execution of an order.
  • Cancel Report-submitted when an order is fully or partially canceled. It may also be used to report a reduction in share quantity or the cancellation of all remaining shares of an order.
  • Cancel/Replace Report-submitted when the terms of an order are modified by a customer.
  • Combined Order/Execution Report-submitted when an order is received and executed contemporaneously or when an order is received and fully executed in one trade, in the same day, with no routing or modifications. It may be used in place of a separate New Order and Execution Report.
  • Combined Order/Route Report -is used for contemporaneous orders and routes or for orders received and fully routed on the same day. It is an alternative to sending a separate New Order Report and Route Report.

(Last updated 02/18/10)

 

D4. What is a Firm Order Report (FORE)?

A Firm Order Report (FORE) is a file containing one or more Reportable Order Event records, also known as reportable order events (ROEs) that is sent by an Order Sending Organization (OSO) or reporting firm to OATS. A FORE may contain many different types of ROEs, such as any combination of New Order Reports, Routing Reports, and Execution Reports, but all ROEs in a FORE must be for the same order receiving firm. If one OSO transmits order data for several firms, it must send a different FORE file for each firm. (Last updated 05/16/00)

 

D5. What is an OATS Business Day?

For the purposes of OATS reporting, a business day begins after the close of The Nasdaq Stock Market on one market day and ends at the close of The Nasdaq Stock Market on the next market day. For example, Wednesday’s OATS Business Day begins at 4:00:01 p.m., Eastern Time (ET) on Tuesday and ends at 4:00:00 p.m., ET on Wednesday. Any events occurring during this time period must be reported to OATS by 8:00:00 a.m., ET on Thursday. Monday’s business day begins 4:00:01 p.m., ET on Friday and ends at 4:00:00 p.m.ET on Monday. If Monday is a holiday, orders received after 4:00:00 p.m., ET on Friday must be reported to OATS by 8:00:00 a.m., ET on Wednesday. (Last updated 3/28/13)

 

D6. What is an OATS Reporting Day?

An OATS Reporting Day is the time period during which an order event must be reported to OATS or be marked late by FINRA. Events occurring during an OATS Business Day must be submitted to OATS by 8:00:00 a.m., Eastern Time (ET) the next calendar day. For example, an order received at 2:00:00 p.m., ET on Thursday must be reported by Friday at 8:00:00 a.m., ET and an order received at 10:00:00 p.m., ET on Friday must be reported by Tuesday at 8:00:00 a.m., ET. (Last updated 3/28/13)

 

D7. What is an Order Sending Organization?

There are two primary types of Order Sending Organizations (OSOs).A Transmitting OSO packages files and physically transfers order data to OATS via FTP, SFTP, IFT, or the Web interface. A Reporting OSO is authorized to view the Order Receiving Firm’s data including file status, statistics, and record rejections; for example, the Reporting OSO may be a clearing firm that is responsible for repairing rejected records on behalf of the Order Receiving Firm.

 

In addition, all parties submitting order data to OATS on their own behalf, through another member firm or entity, or on behalf of other member firms or non-member entities receive an OSO ID, which identifies those parties as registered with OATS. NOTE: Each correspondent of a clearing firm must be registered with OATS and receive a separate OSO ID. (Last updated 3/28/13)

 

D8. What is a Reportable Order Event?

A Reportable Order Event (ROE) is a record representing an event in the life cycle of an order (e.g., order receipt, order cancellation, or order execution) that firms are required to report to OATS. There are several types of ROEs that must be reported to OATS: New Order Report, Routing Report, Desk Report, Execution Report, Cancel Report, Cancel/Replace Report, and Combined Order/Execution Report. (Last updated 7/06/98)

 

D9. Define the term Routing.

When an order is received or originated by a FINRA member and transmitted to another member or non-member (e.g., a foreign stock exchange) for handling or execution, it has been routed. Routing can also been said to occur between two MP IDs. For instance, if a non-market maker receives an order from a customer and transmits the order to a market maker for execution, the order has been "routed" to the market maker. Amendments to FINRA Rule 7440 specifically address order routing to non-members. (Click here to read or download FINRA Rules 3310 and 7410 through 7470.) NOTE: Non-member electronic order routing and trading systems are not covered under this definition. Orders are routed through or via such entities, not to them. (Last updated 3/30/09)

 

D10. FINRA Rule 7440 specifies that I must indicate when I route orders to a non-member. Define "non-member".

Non-members are defined as firms that are not members of FINRA. Typically, non-member firms do not have MP IDs assigned; however, there are some exceptions. If a non-member has an MP ID assigned you must indicate that an order was routed to a non-member ( i.e., the Destination Code "N"), and you may report that MP ID in the "Sent to Firm MP ID" field on the Route Report.

 

Similarly, when members receive orders from non-members, they must indicate in the New Order Report in the Member Type Code field an "N" and they may report the non-member's MP ID in the Routing Firm MPID field.

 

Non-member electronic order routing and trading systems are not covered under this definition. It is not necessary to indicate when orders are routed through or via such entities. Click here to read or download FINRA Rules 3310 and 7410 through 7470. (Last updated 3/28/13)

 

D11. Can you define "a proprietary order originated in the normal course of market making activities"?

For OATS, "a proprietary order originated in the normal course of market making activities" is a proprietary order originated by a firm for its market making account. Such orders are not required to be reported to OATS. For example, if a market maker decides to purchases shares of ABCD for its market making account and then sends an order to another market center or executes a trade with another broker/dealer to purchase those shares, which are placed into its market making account, no order events are required to be reported to OATS. If, however, a market maker receives an order from another broker/dealer (including another market maker), retail customer, or institution to sell 100 shares of ABCD and it fills that order from its market making account, the order received by the market maker and all associated order events are required to be reported to OATS. All non-market making proprietary orders originated by a firm must be reported to OATS. For example, an order originated by a non-market making desk, such as the arbitrage desk, is required to be reported to OATS. (Last updated 2/14/08)

 

D12. What is an Order Receiving Firm?

An Order Receiving Firm is a FINRA member firm that is subject to OATS reporting, which is defined as a firm that originate or receives an oral, written, or electronic instruction to effect a transaction in a NMS stock and/or OTC Listed security. The instruction may originate from a customer, another firm, or another department within the firm. (Last updated 3/30/09)