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Definition: Automated Confirmation Transaction Service (ACT)
Automated Confirmation Transaction Service (ACT) is a technology platform that is designed to monitor, record and report the clearing of trades in over-the-counter (OTC) and NASDAQ security markets for public dissemination and regulatory purposes. ACT provides faster access to trade information and increases efficiency by relaying real-time trading information to traders and investors. Thus, ACT serves to increase transparency and acts as a risk-management system by allowing clearing houses to monitor the activities of traders.
ACT is used to compare trade information reported by ACT participants. ACT then transfers the trade information to the National Securities Clearing Corporation (NSCC) for the purpose of clearing the trade and settling the contractual obligations. It also transfers documentations pertaining to the transactions automatically to the National Trade Reporting System. ACT is also referred to as the Trade Reporting Facility (TRF) by the Financial Industry Regulatory Authority (FINRA) and must comply with the rules set forth by FINRA.
ACT participants are required to obtain a unique Market Participant Symbol (MPID) for identification and use this symbol for trade reporting, entering relevant trade related input and for validation of the trade information. ACT participants can access the service via Nasdaq workstations or via computer interfaces during specified operating hours.
The NASD TRF electronically facilitates trade reporting and clearance of trades for securities that are listed on Nasdaq and other listed securities via the ACT service.
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