POST-TRADE TRANSPARENCY ON NASDAQS NATIONAL MARKET SYSTEM

This article examines late trade reporting on the Nasdaq National Mark et System. A substantial number of trades are reported out-of-sequence on both absolute levels and relative to the combined centralized exch anges. We find minimal support for NASD permitted reasons for the late trade reporting. Evidence suggests that market makers could use late trade reporting to manage the release of information. This evidence is consistent with the hypothesis that the delayed reporting of trades i s neither a random occurrence nor fully explainable by factors outside the market maker's control. (C) 1998 Elsevier Science S.A. All rights reserved.