OATS Report - December 19, 2002

December 19, 2002

NASD began posting each member's NASDAQ Execution System Order/Route Matching statistics on the OATS Web interface on November 1, 2002. These statistics reflect the percentage of OATS Route Reports and/or Combined Order/Route Reports with a Routing Method Code of "U" (SuperMontage) or "L" (SelectNet) that OATS was able to link to the related order in SuperMontage or SelectNet.

Effective December 2, 2002, NASDAQ fully implemented SuperMontage and began routing orders sent to SOES and SuperSoes to SuperMontage. Member firms are urged to update their systems, in particular their OATS reporting systems, to reflect the appropriate OATS Routing Method Code, SuperMontage (Routing Method Code "U"), as soon as possible.

With the full implementation of SuperMontage, members are expected to report the correct Routing Method Code for each order routed to SuperMontage or other destinations. For a short time, however, members may continue to submit to OATS Route Reports and Combined Order/Route Reports with the Routing Method Codes "S" (SOES) and "O" (SuperSoes) without those events being rejected. Members should note that on a date to be announced shortly, OATS processing will be modified to reject Route Reports or Combined Order/Route Reports that use the Routing Method Codes "S" or "O". As of the date of that future modification, Route Reports and Combined Order/Route Reports submitted with the Routing Method Code of "S" or "O" will be rejected for an Invalid Routing Method Code. (The Routing Method Code of "L" (SelectNet) remains valid.) A follow-up announcement regarding the date of effectiveness of this processing modification will be made on a timely basis.

OATS attempts to match Route Reports and/or Combined Order/Route Reports with a Routing Method Code of "U" (SuperMontage) or "L" (SelectNet) to the related order entered into the corresponding NASDAQ Execution System based on the fields in the following table:

SuperMontage SelectNet OATS
Entry Date Trade Date Order Sent Timestamp (Date and Time)
Entry Time Entry Time Order Sent Timestamp (Date and Time)
Issue Symbol Issue Symbol Issue Symbol ID
Order Entry Firm MPID Order Entry Firm MPID Order Receiving Firm MPID
User Order ID Branch/Sequence Code Routed Order ID
    Routed Order ID

Similar to the Order/Trade Matching sections of the OATS Web interface, the system will display Order/Route Matching statistics up to 30 business days. The system will also display the unmatched records for 10 business days. Firms are responsible for monitoring these statistics to ensure that they comply with all applicable reporting requirements.

Steps for navigating the Order/Route Matching section of the OATS Web interface are available in the OATS Subscriber Manual.

Members will need to revise their Written OATS Supervisory Procedures ("WOSPs") to include Order/Route Matching as part of their supervision. Member firms will need to (1) designate a qualified person to conduct the supervisory review for Order/Route Matching; (2) detail how the review will be conducted; (3) denote how frequently the review will occur; and (4) provide documentation of the review along with any remedial action.

If you have any questions or concerns regarding the Order/Trade Match Statistics, or on OATS in general, please contact the OATS Help Desk at (800) 321-NASD.