What is 'Last-Sale Reporting'

Last-sale reporting refers to the Nasdaq stock market’s requirement that dealers must submit details about the quantity and price of any stock sale to Nasdaq within 90 seconds of any transaction.

BREAKING DOWN 'Last-Sale Reporting'

Last-sale reporting grew out of the need to ensure Nasdaq’s computerized trading system complied with regulations enforced by the U.S. Securities and Exchange Commission. In order to improve the transparency and efficiency of markets, regulators require that market makers use real-time trade reporting to provide a public record of stocks. Since Nasdaq’s trades take place electronically over a network rather than on the exchange, market makers must take responsibility for delivering trade data directly to the exchange. The 90-second window for trade reporting required by Nasdaq fulfills the exchange’s regulatory obligation for real-time trade reporting.

NYSE vs. Nasdaq

Nasdaq’s launch in 2006 created the largest global exchange company. Though Nasdaq OMX technically has its headquarters in New York, it operates markets throughout the world. At the time it launched, the primary trading platforms relied upon specialists to facilitate trade on the exchange using an auction-based system where buyers and sellers compete directly with one another to strike deals. The New York Stock Exchange (NYSE), for example, employs specific firms as market makers to work the floor of the exchange, reporting all bid and ask prices in a timely manner, setting opening prices and acting as a catalyst for trades. Specialists act as third-party facilitators, matching buyers with sellers in order to keep up the flow of trade across the market.

By contrast, Nasdaq uses over 300 market makers, none of which actually operates at a fixed, physical exchange and all of which enter directly into trades. Investment companies that act as Nasdaq market makers also act as dealers in securities over the exchange’s network. These firms purchase shares of stocks to amass an inventory to use as a basis from which to sell shares to others on the network, either to investors or other market makers. Dealers will also purchase shares from investors or other dealers, adding those shares back into their inventories.

In order to maintain transparency across the market and drive competitive pricing among market makers, any exchange needs to make current information on sales available to all market participants. While the NYSE gets this information from the specialists who facilitate trades on the exchange, Nasdaq trades have no third party to track trade data. Therefore, Nasdaq requires dealers to provide trade data directly to the exchange.

RELATED TERMS
  1. Nasdaq National Market Securities ...

    The NASDAQ National - Nasdaq NM is the market, comprising more ...
  2. Make A Market

    Make a market is an action whereby a dealer stands by ready, ...
  3. Market Maker

    A broker-dealer firm that accepts the risk of holding a certain ...
  4. Nasdaq 100 Index

    The Nasdaq 100 Index is a basket of the 100 largest, most actively ...
  5. Specialist Unit

    A specialist unit was a group of people or firms that served ...
  6. H

    H is a Nasdaq stock symbol specifying that it is the second preferred ...
Related Articles
  1. Investing

    How Nasdaq Continues To Innovate

    For centuries, a stock market was a physical arena where buyers and sellers traded shares. Then the NASDAQ opened and changed everything.
  2. Investing

    Why Do Companies Choose NASDAQ for Their IPO?

    The NYSE is known for its prestige so why do some companies opt to list on the NASDAQ instead?
  3. Investing

    Stock Exchanges Around The World

    We tell you about five of the most popular stock exchanges from around the globe.
  4. Tech

    Nasdaq CEO Hints at Future Cryptocurrency Exchange

    Nasdaq may consider becoming a cryptocurrency exchange, pending regulation.
  5. Insights

    The Birth of Stock Exchanges

    Learn about the evolution of stock exchanges, from the Venetian states to the British coffeehouses, and finally to the NYSE.
  6. Insights

    What's The Difference Between The Dow And The Nasdaq?

    The way people throw around the words “Dow” and “Nasdaq” makes them seem synonymous with “the market.” But there are important differences.
  7. Investing

    Why Companies Change Exchanges

    Companies don't elect to leave an exchange so much as they're asked. Find out why.
  8. Trading

    Electronic Trading Tutorial

    Learn about the systems that run the market.
  9. Investing

    Strategies To Trade The Nasdaq Index

    The Nasdaq is by far the best-known technology index in the world, and there are plenty of strategies to trade on the Nasdaq using ETFs and options.
RELATED FAQS
  1. What's the difference between a Nasdaq market maker and a NYSE specialist?

    What's the main difference between a specialist and a market maker? Not much. Both the New York Stock Exchange (NYSE) specialist ... Read Answer >>
  2. What are the advantages and disadvantages of listing on the Nasdaq versus other stock ...

    Discover some of the primary advantages and disadvantages that exist for companies listed on the Nasdaq exchange rather than ... Read Answer >>
  3. How do I invest in the Nasdaq or the NYSE? Is it even possible? Would I want to? ...

    The Nasdaq and the NYSE are stock exchanges that trade securities. Nasdaq stands for National Association of Securities Dealers ... Read Answer >>
  4. If everyone is selling in a bear market, does your broker have to buy your shares ...

    Learn about who the counterparty to your trades is, and how your broker functions during a market sell off. Read Answer >>
Trading Center