Automated Confirmation Transaction Service – Definition

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Automated Confirmation Transaction Service – ACT

An Automated Confirmation Transaction Service (ACTA) is a system for reporting all securities transactions done in the over-the-counter (OTC) and NASDAQ securities markets. ACT is an electronic system that makes adequate documentation of reporting and clearing of trades in the Nasdaq market. This system was a faster alternative to the Trade Acceptance and Reconciliation Service that was previously used. ACT is otherwise called ACT Service.

A Little More on What is an Automated Confirmation Transaction Service – ACT

Nasdaq began the use of ACT service in 1998 before it was developed, the Trade Acceptance and Reconciliation Service (TARS) performed the same function as ACT. The central goal of the automated confirmation transaction service is to enhance transparency and accountability in the NASDAQ markets. ACT is also a system that monitors and records all clearing of trades in the NASDAQ markets and over-the-counter (OTC).

Reference for “Automated Confirmation Transaction Service – ACT” › Concepts › Finance and Economics…

Academics research on “Automated Confirmation Transaction Service – ACT”

Short selling and the weekend effect in Nasdaq stock returns, Christophe, S. E., Ferri, M. G., & Angel, J. J. (2009). Short selling and the weekend effect in Nasdaq stock returns. Financial Review, 44(1), 31-57. We examine daily short selling of Nasdaq stocks to explore whether speculative short selling causes a significant portion of the weekend effect in returns. We identify a weekend effect in speculative short selling whereby it constitutes a larger percentage of trading volume on Mondays versus Fridays. We find an opposite effect in dealer short selling, consistent with market makers adding liquidity and stability. Our main finding is that speculative short selling does not explain an economically meaningful portion of the weekend effect in returns, even among the firms most that are most actively shorted. This finding contradicts some prior studies.

Short‐selling prior to earnings announcements, Christophe, S. E., Ferri, M. G., & Angel, J. J. (2004). Short‐selling prior to earnings announcements. The Journal of Finance, 59(4), 1845-1876. This paper examines short‐sales transactions in the five days prior to earnings announcements of 913 Nasdaq‐listed firms. The tests provide evidence of informed trading in pre‐announcement short‐selling because they reveal that abnormal short‐selling is significantly linked to post‐announcement stock returns. Also, the tests indicate that short‐sellers typically are more active in stocks with low book‐to‐market valuations or low SUEs. The levels of pre‐announcement short‐selling, however, mostly appear to reflect firm‐specific information rather than these fundamental financial characteristics. We believe that these results should encourage financial market regulators to consider providing more extensive and timely disclosures of short‐selling to investors.

Institutional and Regulatory Developments, Vuorenmaa, T. A. (2014). Institutional and Regulatory Developments. In Lit and Dark Liquidity with Lost Time Data: Interlinked Trading Venues around the Global Financial Crisis(pp. 1-5). Palgrave Macmillan, New York. To facilitate the interpretation of the empirical results, the major U.S. centric institutional and regulatory developments are concisely reviewed.

Revelation of US OTCBB Disclosure System to Chinese Over-the-Counter Market Disclosure, Chen, H. P., & Chang, Q. (2013). Revelation of US OTCBB Disclosure System to Chinese Over-the-Counter Market Disclosure. In Applied Mechanics and Materials (Vol. 427, pp. 2940-2945). Trans Tech Publications. Integrated Bayesian and Nash equilibrium model, using game theory mathematical calculation method, we researched the game between the government and the market maker in the U.S. OTCBB information disclosure. We concluded that government should strengthen management of the information disclosure mechanism, improve the information disclosure is the key to resolve the problem of asymmetric information, OTCBB information disclosure policies and measures need to be perfected. According to this, we researched the contents of U.S. OTCBB information disclosure and its characteristics, also we analysis the information disclosure system of the U.S. OTCBB experience and Its Enlightenment to China and use for reference.


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