MSRB NOTICE 2004-37 (NOVEMBER 17, 2004)


MSRB Rules G-14 on transaction reporting and G-12(f)(i) on comparison of inter-dealer transactions have been amended to require mandatory use of real-time comparison and trade reporting systems, beginning in January 2005.[1]  Brokers, dealers and municipal securities dealers (“dealers”) will use National Securities Clearing Corporation’s Real-Time Trade Matching system (“RTTM”) for real-time comparison of inter-dealer trades and will use MSRB’s Real-Time Transaction Reporting System (“RTRS”) for real-time trade reporting.[2]  Use of certain features of RTRS will become mandatory on January 10, with the complete transition to RTRS and real-time comparison and trade reporting occurring on January 31.[3]

The RTRS Test Plan, published in July 2004, contains important testing requirements for dealers.[4]  The schedule set forth in the Test Plan requires all RTRS certification testing (which includes the requirement to be tested on RTTM) to be completed no later than December 15, 2004.[5]  Testing in accordance with the Test Plan is mandatory under Rule G-14 and failure to do so may subject dealers to regulatory sanctions.  At this time, dealers should review their preparations for real-time comparison and trade reporting and ensure that RTRS testing requirements have been completed or will be completed on schedule.


Dealer preparations for real-time reporting and comparison of trades should now be nearly complete. The real-time system for comparison of inter-dealer trades became available for production use in June 2004.  The MSRB opened RTRS for beta testing in April 2004 and for certification testing in July 2004.  A number of dealers have completed testing requirements for real-time trade comparison and trade reporting.  Many of these dealers already have converted production systems to real-time trade comparison and trade reporting formats in anticipation of the January deadline.  The MSRB encourages dealers that have completed their preparations for real-time comparison and trade reporting to make their systems conversions as early as possible so that any implementation issues can be addressed before real-time trade reporting becomes mandatory in January.

While the MSRB is encouraged by the early progress made by dealers completing RTRS certification testing, there remain dealers that have not yet made significant use of the RTRS testing platform. A successful implementation of real-time trade reporting in January 2005 depends in large part on dealer preparations, including testing requirements, being completed on schedule.[6]  It is very important for dealers that have not yet completed RTRS testing to ensure that they are on track to complete testing on schedule.

Significant elements and deadlines from the Test Plan are reviewed below.


Every dealer registered with the MSRB must complete and submit Form RTRS.[7]  Through Form RTRS, dealers inform MSRB whether they will be using the message-based method for reporting trades, the Web-based method for reporting trades, or both.[8]  It also provides the MSRB with important dealer contact information.  Form RTRS was due on October 1, 2004.


The RTRS Test Plan specifies the following schedule for dealers intending to use the “message-based” method to report their trades. By October 1, 2004, dealers using the message-based method were required to be ready to conduct tests and, unless already certified or in the process of testing, were also required to schedule a date to begin testing with the MSRB.  By December 15, 2004, all dealers using the message-based format must successfully test their ability to report trades within 15 minutes and must have obtained MSRB certification.


The RTRS Test Plan specifies the following schedule for dealers intending to use the Web-based method to report their trades.  By October 1, 2004, dealers intending to use the RTRS Web for more than five trades per week (and not using messaging for any trades) were required to complete the RTRS Web test.  By December 1, 2004, dealers using the RTRS Web for five or fewer trades per week must complete the RTRS Web test.[9]


Some dealers are planning to use agents or “intermediaries” to submit trade reports for comparison and trade reporting.  A dealer planning to use an intermediary (i.e., its clearing broker and/or service bureau) to submit trades may complete RTRS testing requirements by proxy through its intermediary.[10]   The dealer, however, remains responsible to ensure that this testing is accomplished in accordance with the schedule.  Dealers that use intermediaries for trade reporting should check with their intermediary to ensure that it is certified or is becoming certified with the MSRB and that the agent can transmit data and provide the dealer with feedback within the required reporting deadline.[11]

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Questions concerning Rule G-14 requirements should be directed to Larry M. Lawrence, Policy and Technology Advisor, at (703) 797-6600.  Questions regarding schedule dates and the progress of testing should be directed to an MSRB Transaction Reporting Assistant at (703) 797-6600. 

November 17, 2004

[1] In December 2003, the MSRB announced the operational plan for reaching real-time trade reporting and comparison in January 2005.  “Real-Time Transaction Reporting: Revised Schedule and Operational Plan,” MSRB Notice 2003-44 (December 11, 2003).  The MSRB filed the associated rule changes with the Securities and Exchange Commission (“SEC”) in June 2004. See “Real-Time Transaction Reporting: Notice of Filing of Proposed Rule Change to Rules G-14 and G-12(f),”  MSRB Notice 2004-13 (June 1, 2004).  The SEC approved these rule changes in August 2004.  See  “Approval by the SEC of Real-Time Transaction Reporting and Price Dissemination: Rules G-12(f) and G-14,” MSRB Notice 2004-29 (September 2, 2004). All notices are available at  

[2] A single inter-dealer trade report to RTTM is used for both comparison and trade reporting purposes. NSCC forwards comparison data to the MSRB for use in RTRS.

[3] See “Notice of Filing of Implementation Plan for the MSRB’s Real-Time Transaction Reporting System,” MSRB Notice 2004-36  (November 17, 2004)

[4] See “Real-Time Transaction Reporting:  Summary of Revised Certification Test Plan,” MSRB Notice 2004-24 (July 28, 2004), at

[5] Earlier deadlines apply in certain cases.  Dealers that intend to report their trades exclusively via RTRS Web, and that effected more than five trades per week last year, were required to complete testing by October 1, 2004.  Dealers that intend to report exclusively via RTRS Web and that effected five or fewer trades per week must complete testing by December 1, 2004.  These cases are further described below.

[6] The RTRS test platform will continue to be open after December 15.  After December 15, however, dealers should be using the testing platform only for minor or last minute system changes that may need to be tested before January 31. 

[7] See “MSRB Will Make Form RTRS Available On-Line,” MSRB Notice 2004-21 (June 24, 2004), at  Dealers that effect trades in municipal fund securities, but no other municipal securities, are exempted from testing because Rule G-14 does not require such trades to be reported.  These dealers, however, are still required to complete Form RTRS.

[8] The “Message-based” and “Web-based” trade reporting methods are described in the RTRS Operational Plan set forth in MSRB Notice 2003-44 (December 11, 2003). Using the message-based method of trade reporting, the dealer will send electronic messages containing trade data to RTRS via NSCC and receive interactive feedback messages from RTRS via NSCC.  Using the Web-based method for trade reporting, the dealer will access the MSRB’s RTRS Web site to enter or view its trade data directly in RTRS. Dealers also may enter and view their inter-dealer trade information via an RTTM Web browser.

[9] Each dealer’s trading frequency was computed based upon its reported trade activity during the period of July 1, 2003 through June 30, 2004.

[10] Dealers using intermediaries to report transactions via messaging nevertheless may wish to have the Web-based method available to view transactions in RTRS.  If such a dealer wishes to use the Web-based method to submit or modify transactions, Web testing is required.

[11] The dealer and its intermediary must work together to ensure that the reporting of trades will occur with the appropriate deadline in the real-time transaction environment.