Trade Processing and Trace Reporting
for KopenTech Capital Markets

KopenTech Capital Markets (KCM), a wholly owned subsidiary of KopenTech LLC, is a FINRA-registered broker-dealer with a license to operate an Alternative Trading System (ATS) by the SEC. The KCM ATS has two separate online platforms, KTX AMR platform ( and KTX Trading platform ( The KCM ATS acts as an order-matching service between CLO investors and broker-dealers. As such, KCM must follow the FINRA TRACE reporting requirements outlined below.

KCM Services

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KCM Settlement Involvement

KCM is not involved in the clearing or settlement for CLO securities. Those activities are performed by the broker-dealers and, in case of KTX AMR, by the Trustee. In KTX Trading, both buyers and sellers are facing the broker-dealer. In KTX AMR, buyers are facing the broker-dealer and the broker-dealer faces the seller (the CLO issuer) through a special account established by the CLO trustee strictly for this purpose. In both cases, KCM does not accept customers funds and is not considered a counterparty in CLO transactions. As a result, KCM does not need to be KYC’d by buyers and sellers. However, member broker-dealers often conduct a thorough operational and information security due diligence on the platform.

KCM TRACE Reporting Requirements

FINRA requires an ATS to report all trades matched on it’s platform in order to monitor their trading activity.
Therefore, KCM reports to FINRA through TRACE all trades that occur on both KTX AMR and KTX Trading platforms.
However, there are substantial differences in the procedures for each platform.

KTX AMR Platform

For any AMR auction that results in a successful clearing of a tranche at a lower margin, KCM is required
to report the transaction on TRACE. KCM is required to TRACE report a sell-side trade between the KCM ATS (seller)
and the broker-dealer (buyer). The broker-dealer is required to match KCM’s TRACE submissionat 4:00pm EST
on the day of the auction, referred to as the AMR Pricing Date.

KTX Trading Platform

All trades that are matched on the KTX Trading platform are required to be reported to TRACE by KCM when
the match is confirmed on the platform by both parties. KCM reports two simultaneous trades: a buy-side trade between
the KCM ATS (buyer) and the CLO investor (seller) and a sell-side trade between the KCM ATS (seller) and the broker-dealer
(buyer). However, neither of KCM’s TRACE submissions are matched by the CLO investor or the broker-dealer. Broker
-dealers perform the same TRACE reporting as if the match was established away from the KTX Trading platform between the two counterparties.

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