Procedure for Documenting RTRS and Dealer System Outages

Rule G-14 requires dealers to report most municipal securities transactions within fifteen minutes of the time of trade execution.  A system outage or other technology-related problem may prevent a dealer from reporting its trades in compliance with Rule G-14.  The MSRB has developed procedures for announcing Real-Time Transaction Reporting System (“RTRS”) system outages that may prevent dealers from reporting trades in a timely manner.  The MSRB has also provided a way for dealers to report their own system outages to the MSRB.

RTRS System Outages

Effective immediately, the MSRB shows the system status of RTRS on its website, including outages and technology-related problems that may prevent dealers from reporting trades in a timely manner.  Dealers can access the system status of RTRS by going to the “Transaction Reporting and Transparency” section at www.msrb.org and selecting “Real-Time Transaction Reporting System Status.”  The MSRB forwards information about RTRS system outages to the agencies charged with enforcement of MSRB transaction reporting rules.

Dealer System Outages

The MSRB has also provided a way for dealers to report their own system outages and technology-related problems (or those of the dealer’s clearing firm or service bureau) that affect the dealer’s ability to comply with MSRB rules.  Reports of technology-related problems are then forwarded to the agencies charged with enforcement of MSRB transaction reporting rules.

In a November 2002 Member Alert, the NASD explained that it “considers whether a system outage or other technology-related problem caused, or contributed to, a member's failure to comply with a rule.”[1]  However, the NASD noted that any mitigation is affected by, among other things:

• the cause, magnitude, duration, and frequency of the system problem;

• the promptness of the notification; and

• the extent to which the member firm proactively addresses the problem.

Whether a dealer’s system outage or technology-related problem will be used as a mitigating factor for enforcement of MSRB rules is ultimately left to the discretion of the enforcement agency.

In the event that a dealer experiences a system outage or other technology-related problem that affects the dealer’s ability to comply with MSRB transaction reporting rules, the dealer may call the MSRB’s Transaction Reporting Department at (703) 797-6600 to report the problem.[2]  A Transaction Reporting Assistant will be available to record information concerning the system outage for forwarding to the appropriate enforcement agency.  Dealers should be prepared to relate the following information:

• the date and time that the problem occurred;

• the date and time the dealer first detected the problem;

• a description of the problem, including the specific systems that were affected (e.g., the member's internal systems, third party vendor system) and the exact nature of the problem (e.g., complete outage, slow transmission time);

• the time the problem was resolved and a brief description of the resolution;

• the severity of the impact (e.g., the approximate number of trades not reported) and a description of how the impact will be addressed;

• contact name and telephone number; and

• any additional information deemed relevant by the dealer reporting the problem.

Questions about this notice may be directed to Jay Jackson, Uniform Practice Assistant.

October 17, 2005