NSCC Offers to Open Up Trade Fail Data Under Reg SHO

Cory Levine, Wall Street & Technology

The National Securities Clearing Corp. (NSCC) has offered to work with the SEC to promote transparency in clearing and settlement by revealing closely guarded trade failure information sooner than it is currrently doing so. Forbes.com reported the development, noting that brokerages have criticized the notion because the information could be a tip-off to proprietary information including trading strategies.Critics have railed on the Street's clandestine protection of trade fail data. They argue that the lack of available information surrounding trade clearing and settlement opens the door for fraud. The NSCC seemed to take this position in its comment letter to the SEC on proposed ammendements to Reg SHO.

Currently, the SEC offers trade fail data on request, but only two months after the date of the failed transaction. The NSCC expects that the transparency brought by revealing the data sooner, in aggregate form, will improve the market and further prevent breaches in short selling regulation.