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// Workers AI · dad joke modeWhy did ACT Nasdaq go to therapy? It had a lot of stock in its emotions.

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From Wikipedia, the free encyclopedia
(Redirected from ACT (NASDAQ))

ACT, or Automated Confirmation of Transactions, is a system for reporting and clearing trades in the over-the-counter (OTC) and NASDAQ securities markets.[1][2] Trades compared through ACT are forwarded as locked-in trades to the National Securities Clearing Corporation (NSCC) for settlement; broker-dealers may alternatively clear through Qualified Special Representative (QSR) agreements with the NSCC.[2][3]

ACT offers a risk management system, approved by the SEC in October 1990, that allows clearing firms to set daily trading thresholds for their correspondent brokers and monitor their activity.[2][3][4] This tool is unique within the clearing business.[citation needed]

Since 2006, ACT technology has served as the platform for the Financial Industry Regulatory Authority (FINRA)/Nasdaq Trade Reporting Facility (TRF), a facility of the Financial Industry Regulatory Authority (FINRA) operated by Nasdaq for reporting off-exchange transactions.[5][6][7]

History

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The National Association of Securities Dealers (NASD) developed ACT as an online trade reporting and comparison system to shorten the comparison cycle for telephone-negotiated trades in Nasdaq securities. A pilot program began on August 30, 1989, with five member firms using the system on test securities; Nasdaq securities were then phased into the pilot alphabetically by ticker symbol, beginning with symbols starting with "A" on November 17, 1989.[8] Participation became mandatory on March 1, 1990, for all self-clearing broker-dealers that were members of a registered clearing agency or had an access relationship with such a member.[3]

On October 26, 1990, the U.S. Securities and Exchange Commission (SEC) approved ACT's risk management functions, which allowed clearing firms to set daily purchase and sale thresholds for their correspondent broker-dealers and to monitor their correspondents' trading activity. In November 1990, ACT also began comparing over-the-counter trades in exchange-listed stocks quoted on the Consolidated Quotation Service.[9]

ACT's reporting obligations expanded during the 1990s. Beginning June 15, 1992, members were required to report broker-to-broker and internalized transactions in regular Nasdaq securities to ACT within 90 seconds of execution.[10] In 1994, the SEC approved rules replacing the manually prepared Form T with electronic reporting through ACT for transactions executed outside normal market hours.[11] In the third quarter of 1998, Nasdaq discontinued the Trade Acceptance and Reconciliation Service (TARS), which had operated since June 1989, and incorporated its reconciliation functionality into ACT.[12]

When Nasdaq began operating as a national securities exchange on August 1, 2006, trade reporting of off-exchange transactions was transferred to the newly created NASD/Nasdaq Trade Reporting Facility (TRF), a limited liability company operated by Nasdaq on the ACT technology platform; it was renamed the FINRA/Nasdaq TRF in 2007 when the NASD became the Financial Industry Regulatory Authority (FINRA).[6] In 2021, Nasdaq re-platformed the ACT Workstation, replacing it with Nasdaq WorkX.[13]

See also

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References

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  1. ↑ "Automated Confirmation Transaction Service (ACT) Overview". Investopedia. Retrieved 2024-07-23.
  2. 1 2 3 "NASDAQ systems and programs" (PDF). sec.gov.
  3. 1 2 3 "Notice to Members 90-28: Automated Confirmation Transaction (ACT) Service Fees". National Association of Securities Dealers. May 1, 1990. Retrieved July 8, 2026.
  4. ↑ "ACT Risk Management". Nasdaq Trader. Retrieved July 8, 2026.
  5. ↑ "FINRA/Nasdaq Trade Reporting Facility (ACT Technology)". Nasdaq Trader. Retrieved July 8, 2026.
  6. 1 2 "FINRA/NASDAQ Trade Reporting Facility Exchange Operation FAQs" (PDF). Nasdaq Trader. Retrieved July 8, 2026.
  7. ↑ "Trade Reporting Facility (TRF)". FINRA. Retrieved July 8, 2026.
  8. ↑ "Notice to Members 89-76: Mandatory Participation in ACT". National Association of Securities Dealers. 1989. Retrieved July 8, 2026.
  9. ↑ "Notice to Members 90-80: SEC Approval of Risk Management Functions". National Association of Securities Dealers. December 1, 1990. Retrieved July 8, 2026.
  10. ↑ "Notice to Members 92-26: SEC Approval of Trade Reporting for Regular Nasdaq Securities". National Association of Securities Dealers. 1992. Retrieved July 8, 2026.
  11. ↑ "Notice to Members 94-71: SEC Approves Electronic Reporting of Off-Hours Trades". National Association of Securities Dealers. September 1, 1994. Retrieved July 8, 2026.
  12. ↑ "Notice to Members 98-40: Nasdaq Integrates TARS Into ACT". National Association of Securities Dealers. May 1, 1998. Retrieved July 8, 2026.
  13. ↑ "Self-Regulatory Organizations; The Nasdaq Stock Market LLC; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Remove Obsolete Rule Text". Federal Register. April 3, 2026. Retrieved July 8, 2026.
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