Commentary

Momtchil Pojarliev
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Some Like It Hedged

BNP Asset Management's Pojarliev discusses a variety of options to address foreign currency exposures. Although there is no single best-practice solution for addressing foreign currency exposures, institutional investors have three main choices, he says.

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April 1, 1998

Market Makers Have More Time to Implement OATS

By Jeffrey L. Winograd

The Securities and Exchange Commission approved a new schedule for the Order Audit Trail System (OATS), giving market makers the extra time they said is necessary for compliance.

OATS, an electronic system designed to gather up to 25 trade details, was proposed as part of Nasdaq's agreement to more aggressively police its members in the wake of price-fixing allegations.

On March 1, 1999, electronic orders received by market makers or electronic communications networks must be reported to OATS.

All electronic orders must be reported to OATS by August 1999, and all non-electronic orders, or manual orders, must be reported to OATS no later than July 31, 2000.

On August 7 this year, all computer-assissted clocks must be synchronized for OATS compliance, while all mechanical clocks must be synchronized by July 1, 1999.

The National Association of Securities Dealers said its NASD Regulation subsidiary will use data collected via OATS with data currently reported through the Automated Confirmation Transaction Service and through Nasdaq to substantially improve its operation.

The NASD said OATS will be an "integrated audit trail of quotation, transaction and order data, greatly enhancing NASD Regulation's surveillance and examination capabilities."

OATS was formally proposed in a filing with the SEC last summer. The new OATS schedule was introduced under prodding by market makers and the Security Industry Association's OATS Ad Hoc Committee.

The group argued it would have been impossible to provide most of the proposed components by an earlier start-up date for those orders currently captured in an automated system.

At a meeting in March last year, members of the OATS committee expressed its concern to SEC staffers present.