NASDAQ OMX PSX and OATS
As recently announced, NASDAQ OMX PSX (PSX) is a new equity trading platform scheduled to launch in the second quarter of 2010, pending Securities and Exchange Commission (SEC) approval.
Firms that are members of both FINRA and NASDAQ PSX will see minimal change from their current OATS reporting obligations upon the official operational date of NASDAQ PSX. However, FINRA reminds firms of their obligations under the OATS Rules to: 1) pass Routed Order IDs when electronically routing an order to another firm that is a member of the same SRO; 2) use the Destination Code of "M" (Member) on their OATS Route and Combined Order Route Reports when routing orders to a member of the same SRO; and 3) use the Member Type Code of "M" on OATS New Order and Combined Order Reports when receiving orders from a member of the same SRO.
In the event an order is routed between two firms that are not members of the same SRO (e.g. a FINRA-only or NASDAQ-only member firm routing an order to a NASDAQ PSX-only member firm), no Routed Order ID is required to be passed and the Destination Code and Member Type Code would, in most instances, both be populated with "N" (Non-member).
Firms routing orders electronically to NASDAQ PSX have an obligation to pass a Routed Order ID to NASDAQ PSX for matching purposes, as they do when routing an order electronically to The NASDAQ Stock Market and NASDAQ BX. Below please find a matrix of fields OATS will use to match OATS Route and Combined Order/Route Reports to the related order in NASDAQ PSX:
|NASDAQ PSX||OATS Report Field|
|Firm ID / Client ID||Order Receiving Firm MPID|
|Issue Symbol ID||Issue Symbol ID|
|Trade Date||Order Sent Timestamp (date portion)|
|Order Update Timestamp||Order Sent Timestamp (timestamp portion)|
When a customer modifies an existing order, OATS Rules require firms to submit a Cancel/Replace report to reflect the modification. If the order being modified had previously been routed to NASDAQ PSX, the member also must update the NASDAQ PSX order to reflect the new terms and conditions of the order. When the member updates the corresponding NASDAQ PSX order, a new Route Report must be submitted to OATS.
NASDAQ PSX requires the member to enter a new Order ID when using the NASDAQ PSX Cancel/Replace functionality; therefore, the new OATS Route Report that reflects the NASDAQ PSX Cancel/Replace event from the customer also must include a new Routed Order ID that matches to the new NASDAQ PSX order. This requirement is to ensure that OATS can match the subsequent Route Report to the NASDAQ PSX record.
Firms using intelligent order routing systems to route orders to the NASDAQ PSX should continue to report only the initial Route as they do today. System and trader generated modifications and reroutes to the NASDAQ PSX that are not at the request of a customer need not be reported to OATS.
Please contact the OATS Helpdesk at (800) 321-6273 with questions regarding this guidance.