December 4, 2000
NASD Regulation reminds firms that they must incorporate OATS into their Written Supervisory Procedures regardless of whether they are transmitting OATS data for themselves or if another entity is reporting on their behalf. Additionally, if another entity is reporting on behalf of the firm, the firm should have a copy of the written agreement with that entity, which specifically outlines the responsibilities of each party. This agreement should clearly state who is responsible for repairing any rejections on behalf of the firm.
A firm's Written Supervisory Procedures should address clock synchronization and OATS reporting. The clock synchronization section should cover how and when clocks are synchronized, who is responsible for clock synchronization, and how the firm evidences that clocks have been synchronized.
Likewise, Written Supervisory Procedures relating to OATS reporting should, among other things, (1) identify the individual responsible for the review of OATS reporting, including, but not limited to, the repair of rejections;(2) describe specifically what type of review(s) is to be conducted; (3) specify how often the review is to be conducted; and (4) describe how the review is to be evidenced. These procedures should incorporate frequent reviews by the firm of data reported on the OATS Web interface.
Should you have any questions on this topic or on OATS in general, please contact Business and Technology Support Services at (800) 321-NASD.