by Craig Donner
The Securities and Exchange Commission (SEC) has approved National Securities Clearing Corporation's (NSCC) rule filing to create a new system that will standardize, streamline, consolidate and modernize how equity trade data is captured for clearance and settlement.
The new system, called Universal Trade Capture (UTC), will mitigate risk and enhance efficiencies by consolidating the four legacy trade capture systems currently used by NSCC into a single, near-real-time validation and reporting engine. NSCC has already migrated two of the four legacy applications and expects to have UTC fully operational by February 2011.
"UTC represents a complete transformation of the trade capture process," said Susan Cosgrove, DTCC managing director, Clearance and Settlement/ Equities. "We're moving to a real-time system that will deliver normalized, or standardized, data in a common output format to firms moments after a trade is executed. UTC's new functionality and features will also help our customers strengthen their internal risk management operations while reducing the cost and enhancing the efficiency of the post-trade process, which is critical to helping mitigate the risks associated with today's fragmented equity market structure and high-frequency trading."
The FIX is in
Trade capture is considered the first step on the road to clearing a trade. It involves receiving transaction data from virtually all equity trading venues, including the major U.S. exchanges, and producing contract reports that are transmitted to the firms for reporting and reconciliation needs.
Under the legacy applications, each marketplace used its own unique format for submitting input data to NSCC, which produced four different contract reports in a machinereadable output (MRO) data file format in batches throughout the day.
UTC leverages the FIX format to create a near-real-time system that will offer a standardized input record from all marketplaces and standardized real-time output messages to participants. The messages will be delivered to customers via MQ or a new universal intra-day MRO file starting in February and via the FIX engine starting in 2Q2011. To ensure maximum flexibility, UTC will also continue to support existing interfaces with markets and members, allowing them to transition to UTC at their own pace. @
[To learn more about the Universal Trade Capture (UTC) system, contact William Kapogiannis at firstname.lastname@example.org or 212.855.5667.]