Automated Confirmation Transaction Service - ACT

What Is the Automated Confirmation Transaction (ACT) Service?

Automated Confirmation Transaction (ACT) Service is an automated data system intended to document and report the clearing of trades on exchanges owned and worked by Nasdaq, which compares trade data entered by ACT participants and submits "secured in" trades to National Securities Clearing Corporation (NSCC) for clearance and settlement; transmits reports of the transactions naturally to the National Trade Reporting System, whenever required, for scattering to the public and the industry; and furnishes participants with monitoring and risk management capacities to work with participation in a "secured in" trading environment.

Understanding Automated Confirmation Transaction Services

Intended to increase transparency, the Automated Confirmation Transaction (ACT) Service is a technology platform that gives quicker access to trade data, increase the effectiveness of trade reconciliation and administrative center transactions and gives online access to the situation with all trade sections.

The FINRA/Nasdaq Trade Reporting Facility\u00ae (TRF) is a regulatory compliance entity worked in partnership by FINRA and Nasdaq for reporting over-the-counter (OTC) transactions in equity securities. ACT is a proven and confided in post-trade technology, and is based on the INET platform, the industry standard for in excess of 90 marketplaces in 50 countries. For over 20 years, the TRF has been supporting OTC trade reporting in equity securities utilizing ACT. ACTs are utilized in the Nasdaq electronic stock market.

Prior to utilizing the ACT, the Nasdaq used the Trade Acceptance and Reconciliation Service, or TARS. The ACT supplanted TARS and assumed its usefulness in the second from last quarter of 1998.

Participation in ACT

As per the SEC, participation in ACT is mandatory for all brokers that are individuals from a clearing agency registered with the Commission as per Section 17A of the Securities and Exchange Act, and for all brokers that have a clearing arrangement with such a broker. Participation in ACT as a market maker (MM) is molded on the MM's initial and continuing compliance with SEC requirements.

Upon execution and receipt by Nasdaq of the ACT Participant application agreement, an ACT Participant might start information and validation of trade data in ACT eligible securities. ACT Participants might access the service by means of Nasdaq terminals or Workstations or through computer interface during the hours of operation determined in the ACT Users Guide. Prior to such info, all ACT Participants, including those that have trade report data submitted to Nasdaq by any outsider, must get from Nasdaq a unique recognizing Market Participant Symbol ("MMID" or "MPID"), and utilize that identifier for trade reporting and audit trail purposes.

Each ACT report will contain the accompanying data:

1. Security identification symbol of the eligible security (SECID);
2. Number of shares or bonds;
3. Unit price, excluding commissions, mark-ups or mark-downs;
4. Execution time for any transaction in Nasdaq or CQS securities not reported in the span of 90 seconds of execution;
5. A symbol showing whether the party presenting the trade report addresses the Market Maker side, ECN side, or the Order Entry side;
6. A symbol showing whether the transaction is a buy, sell, sell short, sell short exempt or cross;
7. A symbol showing whether the trade is as principal, riskless principal, or specialist;
8. Reporting side clearing broker (on the off chance that other than normal clearing broker);
9. Reporting side executing broker as "give-up" (if any);
10. Contra side executing broker;
11. Contra side introducing broker in case of "give-up" trade;
12. Contra side clearing broker (in the event that other than normal clearing broker)

Features

• Each ACT report must contain all relevant data about a specific trade and is distinguishable for market data or audit purposes.
• The Automated Confirmation Transaction (ACT) Service is an automated reporting service being used by Nasdaq exchanges.
• Gatherings, for example, brokers or market makers are required to enter all trade confirmations into the ACT system for matching and clearing, including trades done over-the-counter.