NASD Notice to Members 02-31 - June 2002

NASD Seeks Comment on Proposed Changes to the OATS Rules

Executive Summary

NASD is issuing this Notice to Members to solicit comments from members and other interested parties on proposed changes to the OATS Rules (Rules 6950 through 6957). Specifically, NASD staff is seeking comment on four proposals, which would require that members:

  • record and report execution price, capacity, Automated Confirmation Transaction Service (ACT) control number, and a special circumstances indicator as part of their OATS Execution Reports, but would rescind the requirement that members record and report an identical order identifier (referred to as the branch/sequence number) on the OATS Execution Report and the related ACT trade report;
  • report the execution time rather than prior reference price (".PRP") time or allocation time in OATS Execution Reports;
  • record and report for OATS purposes the route of a proprietary order if they comply with the SEC Limit Order Display Rule by routing that proprietary order in place of a customer order to another market, electronic communications networks (ECN), or market maker; and
  • provide the trading desk receipt time via a Desk Report in addition to the electronic system receipt time reported as their order receipt time on New Order Reports, in those instances when those times differ by more than one second.

Questions concerning this Notice should be directed to: the Market Regulation Department at 240-386-5126 or the Office of General Counsel at (202) 728-8071.