| A# |
5722 |
| P&S #: |
5292 |
| DATE: |
November 26, 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: | RTTM - TRACE Real Time Interface Update - REVISED |
National Securities Clearing Corporation (NSCC) and Fixed Income Clearing Corporation (FICC) have announced their plans to support real-time price reporting for corporate bonds upon implementation of a 15 minute trade reporting requirement by the National Association of Securities Dealers (NASD). This decision was largely based on the widespread demand for such an interface as demonstrated in the recent industry surveys conducted by the Securities Industry Association (SIA) and The Bond Market Association (TBMA), with support from the Regional Municipal Operations Association. These independent surveys indicated broad industry interest in having NSCC/FICC build and maintain an interface from the Real-Time Trade Matching (RTTM) system to the NASD’s Trade Reporting and Compliance Engine (TRACE). In building the interface, NSCC/FICC will leverage RTTM’s common message type and single communications pipeline to provide a straight through processing solution for both trade matching and price reporting for NSCC fixed income products.
Background
In April 2003, FICC issued a Service Advisory to all NSCC participants, announcing that it did not intend to build an interface between NSCC’s new RTTM system (currently being developed) and TRACE once the NASD implemented a 15 minute reporting requirement for corporate bonds. This decision was made because the current NSCC-TRACE interface has long been underutilized.
Given the tremendous industry support for an RTTM-TRACE interface, as shown in the results of both the SIA and TBMA surveys, NSCC has reversed its initial decision and is now in the process of defining the business requirements to support this initiative. Participants will be able to submit to RTTM their street side and customer trades to comply with the expected NASD mandate of 15 minutes reporting. The street side corporate bond submissions will satisfy RTTM matching requirements providing the ability for participants to submit a single message for both street-side reporting and matching. In addition, by using RTTM, NSCC is moving toward establishing a single platform for matching and regulatory reporting for all fixed income products. This will lead to increased processing efficiencies and will preclude the need to support multiple development projects.
Next Steps
Several issues require further analysis prior to publishing the specific functionality of the RTTM-TRACE link and the associated implementation timeframes. In the interim, NSCC will continue to support its existing link to TRACE.
NSCC will issue a second Important Notice soon further delineating the service and implementation plans. Firms may direct any questions or comments to either John Fitzgerald at 212-855-5679, or Sean Delap at 212-855-7627.