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Friday, July 16, 2010

Nasdaq Fund Network #2010 - 4
NASDAQ OMX to Release New MFQS Message Formats on December 6, 2010

Product Impacted:

  • MFQS Inbound Interfaces
    • MFQS Batch File Upload for MFQS website users
    • MFQS FTP Server
    • MFQS CTCI

Contact Information:

What you need to know:

  • NASDAQ OMX® will introduce Mutual Fund Quotation ServiceSM (MFQSSM) inbound message formats on Monday, December 6, 2010.
  • The new MFQS 0050 data formats are designed to support:
    • Advance reporting of dividends, interest payments and other distributions by MFQS fund families and trust sponsors.
    • New money market fund data elements as defined in the Securities and Exchange Commission (SEC) Money Market Reform Act of 2010.

What is changing?

NASDAQ OMX will release new versions of the MFQS inbound message formats on Monday, December 6, 2010. The new MFQS 0050 data formats include the following enhancements:

  • Streamlined messaging for Mutual Funds, Unit Investment Trusts (UITs) and Annuities with expanded Net Asset Value (NAV) and Offer/Market Price fields.
  • Enhanced Money Market Fund messages to accommodate NAV and other data elements outlined in the SEC Money Market Reform Act of 2010.
  • New messaging for Dividends and Distributions to allow for advance reporting of corporate actions.

Why is NASDAQ OMX making the changes?

NASDAQ OMX is modifying the MFQS data formats based on customer feedback as well as new marketplace rules.

Last year, NASDAQ OMX conducted a survey of MFQS and Mutual Fund Dissemination ServiceSM (MFDSSM) subscribers to determine the value of proposed data format changes and system enhancements. Based on the survey results, the top MFQS data format enhancements were:

  • Separate Dividends and Distribution messages with expanded date fields
  • Ability to report Dividends and Distributions in advance
  • Addition of Net Asset Value (NAV) field to the money market fund message

Firms also wanted NASDAQ OMX to expand NAV and offer/price field size and add yield direction fields to all MFQS and MFDS message formats. Several large market data vendors requested that NASDAQ OMX streamline the daily valuation message formats to facilitate more widespread distribution of pricing data for UITs.

Subsequent to the survey, the SEC adopted the Money Market Reform Act of 2010. With the new regulations, the SEC outlined new valuation fields to be reported by the money market funds. Because of the importance of this legislation, NASDAQ OMX has decided to add these data elements to the MFQS system.

When will the MFQS release be implemented?

NASDAQ OMX will release the new MFQS 0050 inbound message formats and new MFDS outbound message formats on Monday, December 6, 2010.

How will the MFQS release be implemented?

For MFQS inbound system users, NASDAQ OMX will release the new MFQS 0050 message formats on Monday, December 6, 2010 in a parallel production mode. To facilitate the MFQS release, NASDAQ OMX will allow fund families, trust sponsors and other pricing agents to continue to report daily price data using the MFQS0040 data formats through the first quarter of 2011. During this transition period, NASDAQ OMX will map the MFQS 0040 data fields to the MFQS 0050 data fields.

While NASDAQ OMX will support backward compatibility for the MFQS 0050 release, firms should be aware of the following limitations:

  • Firms must use the MFQS 0050 data formats to report NAV values over $1000 for mutual funds, annuities and structured products.
  • Firms must use the MFQS 0050 data formats to report UITs or money market instruments with a negative yield value.
  • Firms must use the MFQS 0050 data formats to report NAV values for money market funds.
  • Firms must use the MFQS 0050 data formats to report dividends and distributions with a future effective date. (Currently, firms using the MFQS 0040 data formats may only report dividends and distributions on ex-date.)

Please note that NASDAQ OMX will only support backward compatibility for MFQS 0040 data formats. MFQS will cease to support the MFQS 0030 data formats as of the close of business on Friday, December 3, 2010.

Please also note that the implementation plans are different for MFQS inbound system users and MFDS outbound data feed subscribers. For information on the MFDS release plans, please refer to Data Technical News #2010-24.

Where can I find the new MFQS 0050 specification documents?

MFQS Inbound Interfaces:

Will NASDAQ OMX modify the MFQS website interface for new data formats?

Yes. NASDAQ OMX will revise the price entry screens for the MFQS website interface to capture the new data fields as outlined in the MFQS 0050 specification documents. NASDAQ OMX plans to offer training sessions for MFQS website users in advance of the December 6th release.

Will NASDAQ OMX modify the MFDS outbound data feed formats?

Yes. For details on the MFDS change, please refer to Data Technical News #2010-24.

When will NASDAQ OMX offer testing opportunities for the MFQS 0050 release?

NASDAQ OMX will conduct three Saturday user acceptance tests (UATs) for fund families, trust sponsors and pricing agents in advance of the MFQS 0050 release. The UAT dates are tentatively scheduled for:

  • Saturday, November 13, 2010
  • Saturday, November 20, 2010
  • Saturday, December 4, 2010

NASDAQ OMX will post a testing reminder for the MFQS subscribers once the testing dates are confirmed.

Will NASDAQ OMX modify the MFQS symbology on December 6, 2010?

No. While NASDAQ OMX is expanding the MFQS symbol as part of the MFQS 0050 message format changes, it will not change the MFQS symbol format on December 6th.

NASDAQ OMX has been asked to change to the MFQS symbol format as part of the market-wide equity symbology initiative. Given the scope of work involved, NASDAQ OMX will be looking at MFQS symbology changes as a 2011 initiative.

Does NASDAQ OMX have any other MFQS enhancements planned for 2010?

Yes. Based on customer survey results, NASDAQ OMX is creating a new MFQS web interface for MFQS fund families and trust sponsors to use to submit new listing applications and listing change requests. NASDAQ OMX expects to post details on the new MFQS system interface in August 2010.

Where can I find additional information?

  • Refer to the MFQS product page on the NASDAQ OMX Trader website.
  • Refer to Data Technical News #2010-24.
  • Contact NASDAQ OMX Global Data Products at +1 301 978 5307 (Option #4).
  • Contact NASDAQ OMX Mutual Funds Operations at +1 877 308 0523.

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