Reminder of April 30, 2012 Effective Date Regarding Changes to Transaction Reporting Requirements

The MSRB reminds brokers, dealers and municipal securities dealers (collectively “dealers”) of the April 30, 2012 effective date of changes to MSRB transaction reporting requirements.  The changes remove certain infrequently used data reporting requirements to simplify transaction reporting procedures.[1]

MSRB rules on transaction reporting contain two requirements that have applied to few transactions, yet generated questions from dealers and provided only limited value for use in market surveillance.

The first of these two requirements relates to inter-dealer transactions and requires the identity of an “intermediate dealer,” or correspondent of a clearing broker that passes data to the clearing broker about transactions effected by a third dealer (“effecting dealer”), to be included on applicable trade reports.  One of the original purposes of having the intermediate dealer included in a trade report was to assist market surveillance staff by having an additional dealer associated with a transaction reported in the event that the effecting dealer’s identity was erroneously reported.  However, few transactions contain such an intermediate dealer and, since the November 2009 enhancement to transaction reporting to add the effecting broker to the matching criteria in RTTM, the identity of the effecting dealer is rarely, if ever, erroneous.  Beginning April 30, 2012, dealers no longer will be required to identify intermediate dealers on trade reports.

The second requirement applies to any transaction effected at a price that substantially differs from the market price as a result of the parties to the transaction agreeing to significantly deviate from a normal settlement cycle.  For such transactions, dealers are required to include an identifier on the trade report that allows the trade report to be entered into the RTRS audit trail yet suppressed from price dissemination.  Since only a small number of transactions have been reported with this identifier, beginning April 30, 2012 this special condition indicator will be removed from RTRS and dealers effecting such transactions will be required to use the generic “away from market” indicator.

RTRS SPECIFICATIONS AND TESTING

The MSRB has made a test environment that reflects the changes available to dealers and their agents for making test submissions to RTRS since February 6, 2012.  Links to the current technical specifications can be found below and these documents also are available on the trade data page of the Market Disclosures and Data section of the MSRB web site.

• RTRS Specifications
• RTRS Web User Manual

Questions about testing RTRS should be directed to MSRB Support at 703-797-6668.  Other questions about this notice may be directed to Justin R. Pica, Director, Product Management - Market Transparency at 703-797-6716.

April 17, 2012