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Friday, September 26, 2008

Data News #2008 - 66
FINRA Modifies TDDS Processing Rules To Support Real-Time Trade Dissemination for OTC Equity Securities

Please Route To:

  • Direct FINRA data feed subscribers
  • FINRA market data redistributors

Data Feed Impacted:

  • Trade Data Dissemination Service (TDDS)

Summary:

  • On August 8, 2008, the SEC approved a FINRA rule filing that would align the trade reporting and dissemination requirements for OTC equity transactions involving foreign securities with all other OTC equity securities.
  • With the amendments to NASD Rule 6620, FINRA eliminated the distinctions between domestic and foreign ADR securities from a trade reporting and dissemination standpoint.
  • Effective October 27, 2008, TDDS subscribers will automatically begin to receive real-time trade reports for NNOTC foreign and ADR issues in addition to the end-of-day summary reports.
  • REVISED 10/15/2008: FINRA will not hold the user acceptance test for ACT and TDDS users on Saturday October 18, 2008 as tentatively planned. FINRA will continue to support evening testing opportunities for TDDS subscribers through October 24, 2008.

    • Overview:

    On August 8, 2008, the Securities and Exchange Commission (SEC) approved a Financial Industry Regulatory Authority (FINRATM) rule filing that would align the trade reporting and dissemination requirements for Over The Counter (OTC) equity transactions involving foreign securities (with all other OTC equity securities). Please refer to SR-FINRA-2008-16 for details.

     

    With the amendments, FINRA eliminated the distinctions between domestic and foreign American Depositary Receipts (ADRs) securities from a trade reporting and market data dissemination standpoint. FINRA member firms will be required to report trade transactions for OTC equity securities (excluding Direct Participation Programs (DPPs)) within 90 seconds of execution. In addition, FINRA will begin to disseminate real-time last sale information for transactions in foreign issues and ADRs traded over-the-counter market in the United States.

    FINRA disseminates trade data for OTC equity securities via the Trade Data Dissemination Service (TDDS). From a technology perspective, NASDAQ OMX operates the TDDS on behalf of FINRA. From a market data administration perspective, TDDS is part of the Level 1 data entitlement.

    Market Data Impact:

    Effective October 27, 2008, TDDS subscribers will automatically begin to receive real-time trade reports for all foreign issues and ADRs reported via the FINRA/NASDAQ OTC Reporting FacilityTM (ACT Technology). This is a TDDS processing change only; no data format changes are required for this release.

    TDDS currently support real-time trade dissemination for all securities traded on the OTC Bulletin Board (OTCBB) Service, as well as U.S.-based, non-exchange-listed equity issues that trade on the over-the-counter market (NNOTC). Prior to the October 27th release, FINRA limited the dissemination for foreign issues and ADRs traded NNOTC to the TDDS end-of-day summary report. Please note:

    • The NNOTC securities are identified by market center originator ID value of “u” (lower case u) in the TDDS message header.
    • FINRA assigns 5-character symbols to non-exchange-listed foreign issues and ADRs.
    • For OTCBB and NNOTC foreign issues, the fifth character of the issue symbol is “F”.
    • For OTCBB and NNOTC ADRs, the fifth character in the issue symbol is “Y”.

    The FINRA rule change did not cover the market data dissemination rules for Direct Participation Programs (DPPs). Therefore, DPPs will continue to be disseminated in the TDDS closing spin only.

    Implementation and Testing Dates:

    The TDDS processing change for NNOTC foreign and ADR issues will be implemented on Monday, October 27, 2008.

    While there are no format changes associated with the FINRA rule change, NASDAQ OMXSM will support evening test transmissions for TDDS direct data feed subscribers in advance of the October 27th release. Test transmissions will be available beginning September 29, 2008 via Nasdaq OMX Test Facility during normal business hours and TDDS production channels from 9 p.m. to 10 p.m., Eastern Time (ET).

    Contact Information: