9.2.1. Confirmng trades
Recall from the discussion of trade reporting and settlement on page 95 that after a trade has been reported by both parties to the Real-Time Transaction Reporting System (RTRS), the trade must be compared for completeness and accuracy and matched for settlement. Each party must make trade details available to the other and ensure that the information submitted by the other party is accurate. Trade comparison and matching may be automated via the Real-Time Trade Matching (RTTM) System, or performed manually by the parties.
Almost all municipal securities transactions today are eligible for automated comparison. This includes inter-dealer and customer book-entry trades. The information required for trade comparison is the same information required for trade reporting. Any book-entry bond that has a CUSIP number will generally meet the eligibility criteria. As a result, trades eligible for automated comparison do not require the trading parties to deliver trade confirmations to each other for comparison.
In a transaction eligible for automated comparison, both parties must submit all required information to the clearing agency within 15 minutes of making the trade if the trade was made within business hours. If the trade was made outside of business hours, the information will need to be submitted within 15 minutes of the opening of the next business day. This requirement is essentially met when the two parties have submitted their trade reports. Should the transaction fail to compare, the parties must follow the RTTM’s procedures to promptly correct the trade information. Once a match is made, the RTTM will automatically send the matched trade information to the NSCC for clearing and settlement.
However, some bonds still continue to be compared and cleared manually. Securities that are ineligible for automated comparison are generally those that are not fully registered (bearer bonds) or are not fully transferable (certain