Customer Transaction Reporting Reminder on Transactions with Issuers and New Error Codes

Questions about this notice should be directed to John Baughman, Senior Data Analyst and Supervisor, at (202) 223-9347.

MSRB rule G-14 requires that all transactions effected with customers must be reported to the MSRB by midnight on the day of the trade. The Board reminds submitters of transaction information to the Transaction Reporting System that MSRB rule D-9 defines "customer" as "...any person other than a broker, dealer, or municipal securities dealer acting in its capacity as such or an issuer in transactions involving the sale by the issuer of a new issue of its securities."¹ The Board has discovered that, in at least one instance, sales by an issuer of a new issue to the underwriter may have been reported as a customer trade. A sale by the issuer to the underwriter of a new issue underwriting should not be reported to the MSRB Transaction Reporting System. Of course, sales of the new issue by the underwriter to customers or to other dealers must be reported either as customer trades or inter-dealer trades, as appropriate.

The Transaction Reporting System has added two additional error codes. Beginning Monday, April 26, 1999, two new error messages will become part of the Transaction Reporting System data edit routine. These error messages are:

Error 402 RCD IGNORED: Cannot amend CUSIP number

Error 403 RCD IGNORED: Cannot amend trade date

If an attempt is made to amend either the trade date or CUSIP number, the submitter will receive one of these error messages and the existing trade record that previously was submitted to the Transaction Reporting System will remain unchanged.

The Transaction Reporting System allows for some data elements to be amended. This might be necessary, for example, when the settlement date for a new issue changes, causing new prices to be computed. However, some data elements are so integral to a trade that they cannot be amended in the Transaction Reporting System. The Board previously noted in the User's Manual for Customer Transaction Reporting to the MSRB ² that the CUSIP number could not be amended for transactions submitted to the Transaction Reporting System. Similarly, the Board did not anticipate that there would be any general need to revise the trade date after the initial submission of a trade. Dealers wishing to amend a transaction CUSIP number or trade date should cancel the transaction record and send a new record with the correct information.

April 15, 1999

ENDNOTES

1. MSRB Manual (CCH), ¶ 3241 (emphasis added).

2. The User’s Manual for Customer Transaction Reporting to the MSRB is posted on the Board’s web site at www.msrb.org.