Order Audit Trail System - OATS
Definition of 'Order Audit Trail System - OATS'
An automated computer system owned by the National Association of Security Dealers (NASD) that is used to record information relating to orders, quotes and other related trade information from all equities that are traded on the Nasdaq, including over the counter (OTC) stocks. This system simplifies an order's progression from the initial receipt of the order to its eventual execution or cancellation, so that it can be easily tracked for auditing purposes.
Investopedia explains 'Order Audit Trail System - OATS'
The NASD created OATS to ensure that the time sensitive information relating to the events throughout the order execution process is recorded accurately.
For example, according to NASD rule 6953, all "computer clocks and timestamping devices must be synchronized to be within three seconds of the National Institute of Standards and Technology atomic clock". (This atomic clock is highly accurate; it will not gain or lose one second of time in more than 60 million years)