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Friday, May 25, 2012

Futures Technical Update #2012 - 2
NFX Announces Changes to the Batched Trades Functional Specifications Document

Markets Impacted:

Contact Information:

What you need to know:

  • The NASDAQ OMX Futures Exchange SM (NFX SM) announces changes to the Batched Trades Functional Specifications Document for off-exchange trades effective Thursday, May 31, 2012, pursuant to NFX Rule E23 “Block Trades” and E38 “Exchange for Related Positions.”

What has been announced?

The NFX Batched Trades Functional Specifications Document has been updated to reflect new categories of off-exchange trades contained in Rule E38. See the NFX CFTC filing here .

What do member firms need to do?

Members and Member Organizations must observe NFX Rule E23 “Block Trades” and NFX Rule E38 “Exchange for Related Positions” when populating the Block id Tag. Effective May 31, 2012, firms must populate the Block id Tag with one of the prefixes, defined below, before appending the sequence number, e.g., “BLK456123” “EFR657123.” The sequence number must be preceded by “BLK,” “EFP,” “EFR” or “EOO.”

  • Block Trades (“BLK”) – Block Trades in Contracts on the Exchange may only be negotiated and executed outside the NFX XL if all the following requirements are met related to (1) hours of trading (Rule E23(b)), (2) minimum quantity (Rule E23(c)), (3) eligible parties (Rule E23(d)), (4) fair pricing (Rule E23(e)), and (5) timely recording and submission of information (Rule E23(f)).

  • Exchange for Physical (“EFP”) – A privately negotiated and simultaneous exchange of an Exchange futures position for a corresponding cash position (Rule E38).

  • Exchange for Risk (“EFR”) – A privately negotiated and simultaneous exchange of an Exchange futures position for a corresponding OTC swap or other OTC instrument (Rule E38).

  • Exchange of Options for Options (“EOO”) – A privately negotiated and simultaneous exchange of an Exchange option position for a corresponding OTC option position or other OTC instrument with similar characteristics (Rule E38).

    • Where can I find more information?

    • Contact the NFX Help Desk for any firm-related inquiries.

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