A#	5684
P&S #:	5254
DATE:	September 29, 2003
TO:	ALL PARTICIPANTS
ATTENTION:	MANAGING PARTNER / OFFICER; OPERATIONS PARTNER / OFFICER; DIRECTOR OF OPERATIONS; DATA PROCESSING MANAGER; MANAGER P & S DEPARTMENT; COMPLIANCE OFFICER
FROM:	Product Development
SUBJECT:	NSCC TRACE INTERFACE (Reporting Requirement Change)

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Background

The NASD implemented its Trade Reporting and Compliance Engine system (TRACE) on July 1, 2002. TRACE requires firms to report their OTC Corporate bond trades to the NASD within 75 minutes of execution (see SR-NASD-2002-46).

NSCC provides a TRACE interface for Participants through its Fixed Income Transaction System (FITS). Participants can instruct NSCC to route trades to TRACE by supplying the appropriate coding on their FITS OTC Corporate bond trade input via multibatch transmissions or PCWEB input.

TRACE Reporting Requirement Change

The NASD is moving the 75 minute TRACE reporting requirement to 45 minutes effective October 1, 2003 (see NASD Notice to members 03-36). Routing of trades to NSCC should assist participants in meeting their trade reporting obligations.

NSCC FITS Interface to TRACE

NSCC expects to receive more frequent transmissions of trade data when this requirement takes effect and is prepared to process the additional trade batches. As is the case today, properly coded Participant submitted trades will be reported by NSCC to TRACE every 15 minutes beginning at approximately 8:00 a.m. Trades must be submitted to NSCC by 6:15 p.m. to ensure that the NASD will process them that day. Trades submitted to NSCC after 6:15 p.m. will be reported to TRACE the following morning.

Beginning at approximately 8:30 a.m. and continuing every half hour until 6:30 p.m., the NSCC TRACE Accept/Reject report will be sent to Participants.

If you have any questions regarding NSCC’s TRACE interface please contact your Relationship Manager or the undersigned at (212) 855-7623.

Ed Fanning
Vice President, Product Development