Additional Form T Trade...... FYI: Primer on OT
Post# of 22940
Posted On: 08/25/2016 10:41:21 PM
Additional Form T Trade......
FYI: Primer on OTC Form T trades.
OTC.PK retail trades cannot be executed pre-market or after hours. This is a subject of much confusion amongst market participants. "Form T" trades do appear outside of normal hours. However, these are trades that were executed but not reported during regular market hours (9:30 am - 4:00 pm ET). If the "T" trade appears at the beginning of the day it is because the trade wasn't posted at Pink Sheets before 5:00 PM on the preceding day.
A Pink Sheet Primer. What are Form T trades?
The Pink Sheets follows regular market hours, from 9:30 AM until 4:00 PM ET. The Pink Sheets follows the market calendar of the Nasdaq Stock Market and is closed on the days that Nasdaq is closed. The Quotation system is available from 7 am to 5 pm every business day. However, individual traders at a market maker control when the trader's quotes are open and firm.
http://www.pinksheets.com/faq.jsp#8
569 Federal Register / Vol. 72, No. 12 / Friday, January 19, 2007 / Notices 4632. Transaction Reporting
(a) When and How Transactions are reported
(1) Trade Reporting Facility Participants shall, within 90 seconds after execution, transmit to the NASD/ Nasdaq Trade Reporting Facility or if the NASD/Nasdaq Trade Reporting Facility is unavailable due to system or transmission failure, by telephone to the Operations Department, last sale reports of transactions in designated securities executed during normal market hours. Transactions not reported within 90 seconds after execution shall be designated as late.
(2) Transaction Reporting to the NASD/Nasdaq Trade Reporting Facility Outside Normal Market Hours
(A) Last sale reports of transactions in designated securities executed between 8:00 a.m. and 9:30 a.m. Eastern Time shall be reported within 90 seconds after execution and shall be designated as ‘‘T’’ trades with the unique trade report modifier, as specified by NASD, to denote their execution outside normal market hours. Transactions not reported within 90 seconds also shall be designated as “T” trades.
Such {T} transactions not reported before 9:30 a.m. shall be reported after 4:00 p.m. and before 8:00 p.m. {as .T trades} with the appropriate trade report modifier as specified by NASD. 8:00 a.m. and 8:00 p.m. Eastern Time and be designated ‘‘as/of’’ trades.
http://www. style='background-color:yellow;'>nasd.com/web/groups/rules_regs/documents/rule_filing/nasdw_018332.pdf
Pink Sheets and Form T trades
Since the Pink Sheets does not accept pre-market or after hours trades, any stocks traded exclusively on Pink Sheets that contain the "T" indicator on a trade, is a trade that did not meet the NASD 90-second posting rule as per above. If the "T" trade appears at the beginning of the day it is because it wasn't posted at Pink Sheets before 5:00 PM on the preceding day.
There are three types of late reports:
1. Those with a time stamp within a minute and a half after closing are just normal
90-second delays.
Rule 6620.1 OTC Market Makers shall, within 90 seconds after execution, transmit through ACT last sale reports of transactions in OTC Equity Securities executed during normal market hours.
In this case the market makers may have conducted a trade within seconds of closing, but is delayed in reporting until after closing it is showing up a minute after closing. This delay, which is permitted, is often misconstrued as manipulation.
2. Then we have trades later than 90 seconds after closing. These trades fall into two categories and typically involve larger size lots.
a. The first category is sometimes used by financial institutions that are non-market makers to report larger transactions that actually occurred during market hours, but since they do not have access to the ACT (Automated Confirmation Transaction Service) use Form T to report. In essence, bypassing the MMs.
MMs are basically prohibited from these "Off Market transaction" as spelled out in:
A pattern or practice of late reporting without exceptional circumstances may be considered conduct inconsistent with high standards of commercial honor and just and equitable principles of trade, in violation of Rule 2110.
These ”Off Market” trades are typically used by larger investors to buy larger lots at prearranged prices without risk of driving the price upward or downward.
b. The second category involves so called “ex-clearing” lots. Certain transactions may clear and settle outside of the regular clearing system ("ex-clearing" transactions), where two dealers make an arrangement to settle trades between them outside the clearing system.
The process used to balance street side transactions depends on the type of comparison generated and the settlement method for the particular trade.
Trades Comparison is accomplished in one of two ways:
1. Electronically through the use of an automated clearing house such as the NSCC. This the normal way
2. Manually via Ex-Clearing. Ex-Clearing is a manual comparison process that is performed by the brokerage firm’s Purchase and Sales Department. Unusual short coverings can end up settle this way
3. See http://www.brokerage101.com/ for further education
Realize your trading passion with E*TRADE Pro. Visit E*TRADE.com/pro
"Great spirits have often encountered violent opposition from
mediocre minds." Einstein
FYI: Primer on OTC Form T trades.
OTC.PK retail trades cannot be executed pre-market or after hours. This is a subject of much confusion amongst market participants. "Form T" trades do appear outside of normal hours. However, these are trades that were executed but not reported during regular market hours (9:30 am - 4:00 pm ET). If the "T" trade appears at the beginning of the day it is because the trade wasn't posted at Pink Sheets before 5:00 PM on the preceding day.
A Pink Sheet Primer. What are Form T trades?
The Pink Sheets follows regular market hours, from 9:30 AM until 4:00 PM ET. The Pink Sheets follows the market calendar of the Nasdaq Stock Market and is closed on the days that Nasdaq is closed. The Quotation system is available from 7 am to 5 pm every business day. However, individual traders at a market maker control when the trader's quotes are open and firm.
http://www.pinksheets.com/faq.jsp#8
569 Federal Register / Vol. 72, No. 12 / Friday, January 19, 2007 / Notices 4632. Transaction Reporting
(a) When and How Transactions are reported
(1) Trade Reporting Facility Participants shall, within 90 seconds after execution, transmit to the NASD/ Nasdaq Trade Reporting Facility or if the NASD/Nasdaq Trade Reporting Facility is unavailable due to system or transmission failure, by telephone to the Operations Department, last sale reports of transactions in designated securities executed during normal market hours. Transactions not reported within 90 seconds after execution shall be designated as late.
(2) Transaction Reporting to the NASD/Nasdaq Trade Reporting Facility Outside Normal Market Hours
(A) Last sale reports of transactions in designated securities executed between 8:00 a.m. and 9:30 a.m. Eastern Time shall be reported within 90 seconds after execution and shall be designated as ‘‘T’’ trades with the unique trade report modifier, as specified by NASD, to denote their execution outside normal market hours. Transactions not reported within 90 seconds also shall be designated as “T” trades.
Such {T} transactions not reported before 9:30 a.m. shall be reported after 4:00 p.m. and before 8:00 p.m. {as .T trades} with the appropriate trade report modifier as specified by NASD. 8:00 a.m. and 8:00 p.m. Eastern Time and be designated ‘‘as/of’’ trades.
http://www. style='background-color:yellow;'>nasd.com/web/groups/rules_regs/documents/rule_filing/nasdw_018332.pdf
Pink Sheets and Form T trades
Since the Pink Sheets does not accept pre-market or after hours trades, any stocks traded exclusively on Pink Sheets that contain the "T" indicator on a trade, is a trade that did not meet the NASD 90-second posting rule as per above. If the "T" trade appears at the beginning of the day it is because it wasn't posted at Pink Sheets before 5:00 PM on the preceding day.
There are three types of late reports:
1. Those with a time stamp within a minute and a half after closing are just normal
90-second delays.
Rule 6620.1 OTC Market Makers shall, within 90 seconds after execution, transmit through ACT last sale reports of transactions in OTC Equity Securities executed during normal market hours.
In this case the market makers may have conducted a trade within seconds of closing, but is delayed in reporting until after closing it is showing up a minute after closing. This delay, which is permitted, is often misconstrued as manipulation.
2. Then we have trades later than 90 seconds after closing. These trades fall into two categories and typically involve larger size lots.
a. The first category is sometimes used by financial institutions that are non-market makers to report larger transactions that actually occurred during market hours, but since they do not have access to the ACT (Automated Confirmation Transaction Service) use Form T to report. In essence, bypassing the MMs.
MMs are basically prohibited from these "Off Market transaction" as spelled out in:
A pattern or practice of late reporting without exceptional circumstances may be considered conduct inconsistent with high standards of commercial honor and just and equitable principles of trade, in violation of Rule 2110.
These ”Off Market” trades are typically used by larger investors to buy larger lots at prearranged prices without risk of driving the price upward or downward.
b. The second category involves so called “ex-clearing” lots. Certain transactions may clear and settle outside of the regular clearing system ("ex-clearing" transactions), where two dealers make an arrangement to settle trades between them outside the clearing system.
The process used to balance street side transactions depends on the type of comparison generated and the settlement method for the particular trade.
Trades Comparison is accomplished in one of two ways:
1. Electronically through the use of an automated clearing house such as the NSCC. This the normal way
2. Manually via Ex-Clearing. Ex-Clearing is a manual comparison process that is performed by the brokerage firm’s Purchase and Sales Department. Unusual short coverings can end up settle this way
3. See http://www.brokerage101.com/ for further education
Realize your trading passion with E*TRADE Pro. Visit E*TRADE.com/pro
"Great spirits have often encountered violent opposition from
mediocre minds." Einstein
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