What is OATS?
Does it apply to my firm?
What about compliance - what about audits?
Does FINRA recommend your solution?
How does your solution comply with OATS requirements?

What is OATS?

OATS stands for Order Audit Trail System It allows NASD to recreate events in the life cycle of an investor’s order and more completely monitor the trading practices of brokerage firms. Specifically, OATS requires that all events relating to a trade are recorded with an accurate time stamp.

The rules require each FINRA member to synchronize its business clocks used for purposes of recording the date and time of any order related event, with reference to the NIST time source (the "Atomic Clock"), and  maintain and document the synchronization of business clocks on a regular basis.

I'm a small broker/dealer,  do the OATS rules apply to me?

Small firms (with annual revenues of less than $2 million) must meet the OATS requirements if any of the following apply:

• Firm conducts Market Making activity in NASDAQ Stock Market equities securities.
• Firm executes principal transactions with its customers
• Conducts clearing or carrying activities for other firms
• The member have been subjected to any disciplinary action within the last 5 years or fraud action within the last 10 years.

All firms with revenue greater than $2 million must comply with OATS requirements.

What about compliance - what about audits?

Audits of NASD members is not uncommon. In a typical year, NASD investigates some 15,000 examinations for cause – including over 5,000 customer complaints – and conducts more than 2,500 routine audits of its members. NASD will send a letter announcing their intention to conduct an examination.  When conducting the audit, NASD will review order tickets and trading practices.  The member must show that it's trading practices and procedures comply with OATS regulations.

Does FINRA recommend your solution?

FINRA (formerly NASD) N does not specifically recommend vendors. However,  DocuClock is on FINRA's short list of solutions that meet the OATS requirements and is used by brokers around the country.

How does your solution comply with OATS requirements?

DocuClock is a time stamp printer that meets OATS requirements. The printer connects to the trader's PC, and using an Internet connection, the PC can be synchronized to the Atomic Clock for correct time.

• Meets FINRA Rule 7430 (NASD OATS Rules 6950 - 6957)
• Keeps all computers on a LAN synchronized to the NIST Atomic Clock?
• Logs all time settings to meet OATS requirements?
• Reports all events and time adjustments to a savable/printable source?
• Syncs at predefined intervals?
• Has both Internet and modem capabilities to talk with the NIST atomic clock?

DocuClock is on NASD's short list of solutions that meet the OATS requirements and is used by brokers around the country.

ClockWatch software - main page

DocuClock time stamper - main page
ClockWatch OATS page