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Monday, July 23, 2012

Futures Trader Alert #2012 - 7
NFX to Introduce Trading System Counting Period, Effective Friday, July 27, 2012

Markets Impacted:

Contact Information:

What you need to know:

  • Effective Friday, July 27, 2012, NFX is amending NFX Rule E18 to introduce a one-second "counting period" during which time a Market Maker may eliminate a locked or crossed market caused by their electronic quotation.

What is NFX Rule E18?

Currently, NFX Rule E18 provides that when the NASDAQ OMX Futures ExchangeSM (NFXSM) trading system, NFX XL, receives a quote that locks or crosses the NFX XL Best Bid and Offer (BBO), NFX XL will disseminate a new NFX XL BBO at either the locked price or resting price crossed by the Order, then calculate and disseminate a new NFX XL BBO.

What is changing?

Effective Friday, July 27, 2012, NFX is amending NFX Rule E18 to introduce a one-second "counting period" during which time a Market Maker may eliminate a locked or crossed market caused by their electronic quotation.

Notwithstanding the counting period, Market Makers will be obligated to execute orders at their disseminated quotation. The quote that is locked or crossed may be executed by an order during the one-second counting period.

What will happen to unresolved locked or crossed markets remaining after the counting period?

Any unresolved locked or crossed markets remaining after the counting period will be automatically executed.

Will the new counting period apply to orders?

The counting period will not apply to orders, only quotes entered by Market Makers.

Where can I find more information?


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