OTC Link trade messages directed by an OTC Link ATS subscriber to OTC Link ATS in response to a Global OTC quote meet the definition of an order. Because an immediately actionable order is sent to Global OTC as the result of an OTC Link message, the OTC Link ATS subscriber must report the order and route, even if the order is not ultimately executed. Under the Industry Member CAT Reporter phasing schedule, OTC Link ATS subscribers would have an obligation to report to CAT a New Order event and Order Route event for each OTC Link trade message directed by the OTC Link ATS subscriber to OTC Link ATS in response to a Global OTC quote, both executed and unexecuted, beginning in Phase 2a.

However, the Participants are aware that not all Industry Members fully understood that OTC Link trade messages directed by the OTC Link ATS subscriber to OTC Link ATS in response to a Global OTC quote constitute orders (and not negotiations). Given this, the Participants are deferring until Phase 2c the obligation for OTC Link ATS subscribers to report these messages as set forth above. In other words, in Phase 2a, Industry Members can either:

-Report OTC Link trade messages that they direct to OTC Link ATS in response to a Global OTC quote to CAT as negotiated trades. If an OTC Link trade message directed by an OTC Link ATS subscriber to OTC Link ATS in response to a Global OTC quote results in an execution, the OTC Link ATS subscriber would report a New Order event and a Trade event to CAT. While this may generate interfirm linkage errors beginning in October 2020, Industry Members will not be expected to correct such errors, and such errors will not be considered for Industry Member compliance purposes. 

-An Industry Member would have the option – but would not be required to – report a New Order event and Order Route event for these messages in Phase 2a. 

Beginning in Phase 2c, OTC Link ATS subscribers must report a New Order event and Order Route event to CAT for all OTC Link trade messages that they direct to OTC Link ATS in response to a Global OTC quote, both executed and unexecuted. Further, the Order Route event must indicate a route to OTC Link ATS and contain the handlingInstructions value ‘J3’. Global OTC would have an obligation to report an Order Accepted event indicating receipt from OTC Link ATS for each trade message received. Further, the handlingInstructions value on the Order Accepted event must contain the value ‘J3’. Since OTC Link ATS does not have a CAT reporting obligation in Phase 2c, the ‘J3’ handlingstructions value is designed to prevent interfirm linkage errors in Phase 2c. Beginning in Phase 2d, OTC Link ATS will report receipt of the order from its subscriber and the route to Global OTC. Thus, in Phase 2d, the handlingInstructions value ‘J3’ will no longer be required and will be removed as an allowable value. 

Please refer to the Phase 2c and Phase 2d Industry Member Reporting Scenarios for additional details.

Orders submitted directly to Global OTC by Global OTC subscribers are reportable as all other orders commencing in Phase 2a.