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Wednesday, November 9, 2011

Equity Technical Update #2011 - 15
NASDAQ ACT Technology Modifications to Support Short Sale Reporting Changes via FIX, Effective December 12, 2011

Markets Impacted:

Contact Information:

What you need to know:

  • Effective December 12, 2011, NASDAQ OMX® will implement changes to the NASDAQ ACTSM System to support short sale reporting designation changes to accommodate FINRA/NASDAQ Trade Reporting Facility™ (TRF) and FINRA Over-the-Counter Reporting Facility (ORF), as designated by the Financial Industry Regulatory Authority (FINRATM).
  • ACT Trade Reporting Specifications have been updated to reflect these changes.

What is changing regarding reporting of short sale and short sale exempt designations?

FINRA has requested a change to the accepted FIX tag combinations relating to tag 54 (Side) and tag 853 (ShortSaleReason). The table below represents the valid tag and value combinations that will be allowed beginning on December 12, 2011.

Firms must modify their systems accordingly to prevent rejects if they currently submit Side or ShortSaleReason designation combinations other than those defined below.

Valid Trade Entry Tag Combinations
Tag 54 contains Value Description Tag 853 contains Value Description and Notes
1 Buy Blank Not indicated as sold short
1 Buy 2 Selling Customer Sold Short
No ContraBroker present in tag 375
1 Buy 3 Selling Customer Sold Short Exempt
No ContraBroker present in tag 375
1 Buy 4 Contra Side Sold Short
ContraBroker present in tag 375
1 Buy 5 Contra Side Sold Short Exempt
ContraBroker present in tag 375
2 Sell Blank Not indicated as sold short
2 Sell 0 Dealer Sold Short
2 Sell 1 Dealer Sold Short Exempt
8 Cross Blank Not indicated as sold short
8 Cross 2 Selling Customer Sold Short
MPID must be present in tag 375
8 Cross 3 Selling Customer Sold Short Exempt
MPID must be present in tag 375
Please note, all other values and combinations of values in these tags will be rejected.

What are the supported Side and ShortSaleReason designations?

Effective December 12, 2011, the NASDAQ ACT System will begin rejecting trades that are inconsistent with those supported within the specification for tags 54 and 853.

Firms must modify their systems accordingly to prevent rejects if they currently use Side or ShortSaleReason designations that are not defined below for each tag respectively:

Tag 54 Valid Trade Entry Field Values
Tag 54 Value Description
1 Buy
2 Sell
8 Cross
Tag 853 Valid Trade Entry Field Values
Tag 853 Value Description
0 Dealer Sold Short
1 Dealer Sold Short Exempt
2 Selling Customer Sold Short
3 Selling Customer Sold Short Exempt
4 Contra Side Sold Short
5 Contra Side Sold Short Exempt

Is this change applicable to all FIX trade reports, including trades submitted to the FINRA ORF?

Yes, this change will affect all FIX users submitting trades into the NASDAQ ACT System for any security.

Are CTCI users affected by this change?

No, this change is specific to FIX users. CTCI firms will be unaffected by this change.

Why is FIX trade reporting changing?

FIX users submitting trades into the NASDAQ ACT System for any security had previously been able to submit trades designated as short sale or short sale exempt that were inconsistent with FIX specifications. In limited circumstances, the FIX protocol, rather than rejecting the submission, would change the inconsistent data entered to conform with the FIX specifications. In the limited circumstances in which this occurred, inaccurate information may have been reflected in clearing and/or audit trail records. NASDAQ has worked with FINRA to support only trades with designations that meet FIX specifications. FINRA reminds members of their obligations to comply with the rules and technology specifications applicable to all FINRA facilities.

Will NASDAQ OMX offer testing opportunities?

Yes, beginning October 28, 2011, firms have been able to test within the NASDAQ OMX Testing Facility (NTF).

In addition, per the currently published schedule, Saturday testing will be available on December 10th.

Where can I find additional information?

FINRA™, Trade Reporting Facility™and TRF™are trademarks of Financial Industry Regulatory Authority, Inc.


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