As previously announced (via an April 14, 2004 Important Notice and an August 27, 2004 CMU RTTM Update), NSCC will be making changes to its processes that support TRACE Reporting. These changes will be implemented concurrently with the 30 minute TRACE reporting requirement that is slated to go into effect in October, 2004.

As we explained in a prior notice the current NSCC to TRACE interface in place does not facilitate timely submissions to accommodate the revised 30 minute reporting timeframe.

NSCC will be making the following changes in conjunction with TRACE processing:

Those firms that are submitting to NSCC via interactive message will be able to have their initial trades forwarded to the NASD via the current connection (as designated on the trade record). Because the current NSCC to TRACE interface only supports the initial submission of a trade, firms should monitor the NASD TRACE screens to correct rejected trade data. (A detailed User guide on these new screens can be obtained from the following URL address: http://www.nasd.com/mkt_sys/trace_info.asp .) It should be reiterated that while participants can submit modifications and cancellations real-time to RTTM, these records and will continue to not be forwarded to the NASD until the NSCC to TRACE interface is enhanced to support interactive messaging.

NSCC remains committed to working with the NASD to provide the industry with a single pipeline solution for corporate bonds to support 15 minute reporting (slated for mid 2005) , as we have done with the MSRB for municipal bonds.

If you have any questions or comments regarding this notice, please contact your Member Services Representative, call our Hotline at (212) 855-7664 or send an email to CMUhelp@ficc.com.

Sean Delap
Vice President, Product Management