Reminder of OATS Reporting Obligations
August 28, 2002
This article is being issued to remind firms of specific reporting obligations under the OATS Rules and the OATS Reporting Technical Specifications. Please take some time to review your code and operations to ensure the following obligations are being met.
- Use the Rejected ROE Resubmit Flag when Repairing Rejects
Firms must set the Rejected ROE Resubmit Flag to "Y" when repairing Rejects by methods other than over the Web. Failure to set this flag to "Y" when making repairs will cause the resubmitted ROEs to be marked late which in turn could suggest a pattern and practice of late OATS reporting. Please note that such a pattern can result in disciplinary action. Please take the time to ensure you are setting the Rejected ROE Resubmit Flag to "Y" on each and every rejected ROE that you repair.
- Populate the Routing Firm MPID when receiving orders from another firm
Firms and ECNs must populate the Routing Firm MPID on the OATS New Order Report for "wholesale" orders (orders received from other firms). Firms are reminded that this field must be populated when receiving an order from another firm regardless of whether that order is received manually or electronically. Failure to populate this field when receiving an order from another firm is in violation of the OATS Rules. With the October 14th software release any "wholesale" orders and orders received from an ECN that do not have the Routing Firm MPID populated will be rejected.
- Populate the Routed Order ID Field when sending an order electronically to a Nasdaq Execution System
Firms are reminded of their obligation to populate the Routed Order ID field in the OATS Route Report when electronically routing an order to a Nasdaq Execution System. The Routed Order ID must be populated with the same ID number that the firm enters into the Branch/Sequence Number field on the Nasdaq Execution System. These fields will be matched to link the OATS order with the Nasdaq Execution System audit trail. For more information on populating the Routed Order ID field please review the February 2002 OATS Report.
- Use Cancel/Replace Reports
Firms are required to use a Cancel/Replace Report as opposed to a Cancel Report followed by a New Order Report when a customer modifies an order. Cancel Reports are to be used when an order is totally or partially cancelled by a firm or customer. Modifications must be reported by utilizing the Cancel/Replace Report. For more information on this subject please review the April 2002 OATS Report.
- Use Special Handling Codes
Firms must report the appropriate Special Handling Code(s) to identify additional order instructions that serve to qualify the pricing, quantity, execution timing, or execution method of an order. Members must ensure that these instructions are reported on the OATS New Order, Combined Order/Execution, Combined Order/Route, or Cancel/Replace Reports. Failure to do so could result in disciplinary action. Further, failure to accurately report the terms and conditions of an order could result in that order creating "false positive alerts" in NASD automated surveillance systems for such things as Limit Order Display and Limit Order Protection. Please check your code and operations to ensure that the Special Handling Codes are being correctly populated.
Finally, NASD reminds members that it is the order sending firm's responsibility to ensure that it is meeting the requirements identified in the OATS Rules and in the OATS Reporting Technical Specifications and that each member must have in place a supervisory system designed to ensure compliance with all OATS reporting requirements. In this regard, firms should periodically review the data submitted to OATS to ensure it complies with all applicable requirements. Should you have any questions regarding this document or on OATS in general please contact the OATS Help Desk at (800) 321-NASD.