OATS Reporting Responsibilities for Orders Routed to, or Executions Reported on, Other Securities Exchanges
December 19, 2002
NASD is issuing this article to clarify member responsibilities as they relate to OATS reporting when: 1) routing an order to another exchange for handling or execution, and 2) executing an order and reporting the execution on a national securities exchange or a facility operated by a national securities association. For OATS reporting purposes, members have separate and distinct responsibilities under each scenario. Under the first scenario, NASD considers the order routed by the member and therefore, requires that a Route Report be submitted to OATS. In the second scenario, NASD considers the order executed by the member, and therefore requires that an Execution or Combined Order/Execution Report be submitted to OATS. The specific OATS reporting requirements under each scenario are outlined below.
1. Orders Routed to Another Exchange for Handling or Execution
When a firm sends an order to another exchange for further handling or execution, NASD considers the order routed. In this situation, the member must record and report to OATS a New Order Report reflecting the receipt of the order and a Route Report reflecting that the order was sent to another exchange for further handling or execution. On the Route Report, members must populate the Routing Method Code field with "N" (Non-Member) to reflect that the order was sent to an entity that is not an NASD member. Further, firms should populate the "Sent to Firm MPID" field with the market participant ID of the exchange to which the order was routed.
Valid MPIDs include:
2. Reporting of Market Center Code on OATS Execution Reports
As required by NASD Rule 6954, when a Reporting Member executes an order, in whole or part, the Reporting Member must report to OATS the national securities exchange or facility operated by a registered securities association where the trade was reported in the Market Center ID field on the OATS Execution or Combined Order/Execution Report. When a Market Center ID other than "Q" (NASDAQ) or "D" (Alternative Display Facility) is used, OATS will not attempt to match the OATS Execution Report to a trade report in ACT or TRACS.
Valid codes include:
Firms may find additional information regarding the Routing Method Code, the Sent to Firm MPID, and the Market Center ID by consulting the OATS Reporting Technical Specifications or by contacting the OATS Help Desk at (800) 321-NASD.