OATS Compliance Sweeps

June 29, 2001

 

Market Regulation is in the process of implementing a series of new sweeps to help ensure member firm compliance with NASD Marketplace Rules 6950-6957 ("the OATS Rules"). The new sweeps are summarized below. Any questions or concerns regarding these sweeps should be directed to the OATS Help Desk at 1-800-321-NASD.

 

Order/Trade Matching Sweep
The Order/Trade Matching sweep reviews for compliance in matching OATS Execution Reports to ACT trade reports. Firms are required to have the identical MPID, Issue Symbol, Execution Date and Timestamp to the second, and Branch/Sequence Numbers on each of the reports. Firms will be selected on the percentage of OATS Execution Reports not containing a Reporting Exception Code that could not be matched to a related trade report in ACT.

 

Common causes of unmatched Execution Reports include but are not limited to:

 

  • Missing Branch/Sequence Number in ACT or in OATS.
  • Improperly formatted Branch/Sequence Number on one of the reports.
  • Differing Execution Timestamps.
  • Missing Reporting Exception Code.
  • Late Reporting of OATS Execution Reports.


Reject Repair Sweep

The Reject Repair Sweep reviews for compliance in repairing OATS reports that are rejected by OATS for failing to pass syntax or context validations. Firms are selected based on a combination of the number of order events rejected and the percentage of rejects not repaired. Only repairable rejects are included.

 

Daily Non-Reporting Sweep
The Daily Non-Reporting Sweep reviews for compliance in reporting OATS data on a consistent basis. The sweep identifies potential missing data based on comparisons with a firm’s reporting history. Missing data could include:

 

  • All data for a particular day(s).
  • A particular order event type, such as route reports.
  • Partial data, such as receiving only two order events when a firm normally submits 2000 events per day.

 
Missing Routed Order ID Sweep
The Missing Routed Order ID Sweep identifies firms that receive and route orders electronically but fail to pass a Routed Order ID when routing the order. It also identifies firms that receive routed orders electronically but fail to report the Routed Order ID passed on by the routing firm.

 

Late Reporting Sweep
The Late Reporting Sweep identifies firms displaying a pattern or practice of late OATS reporting. OATS automatically marks as late any order event from a particular market day not received by 4:00 a.m. the next day.

 

Negative Subsequent Order Event Sweep
The Negative Subsequent Order Event Sweep identifies firms that are submitting order events that not accurately time-sequenced. For example, a firm submitting Execution Reports with timestamps two minutes prior to the Order Received time would not be reporting time-sequenced data.

 

Missing Route Reports
The Missing Route Report Sweep identifies firms that fail to submit a Route Report when sending an order to another firm despite:

 

  • Reporting a New Order Report.
  • Being identified as the Routing Firm on a secondary firm’s New Order Report.


Missing Execution Reports
The Missing Execution Report Sweep identifies firms that fail to submit an Execution Report when executing an order despite:

 

  • Material new order volume.
  • No Route Reports submitted.
  • Reported ACT volume comparable to reported new order volume.

The above-referenced sweeps are in the process of implementation. Should you have any questions regarding these sweeps or on OATS in general, please contact the NASD OATS Help Desk at (800) 321-NASD.

Last Updated: 6/29/2001