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Thursday, May 23, 2013

Equity Trader Alert #2013 - 47
NASDAQ Introduces the MOPB Routing Strategy, Effective June 14, 2013

Markets Impacted:

Contact Information:

What you need to know:

  • Effective Friday, June 14, 2013, NASDAQ will introduce a new routing strategy, MOPB.
  • NASDAQ has updated technical specifications to reflect this new strategy.

What is the new routing strategy?

Effective Friday, June 14, 2013, The NASDAQ Stock Market® (NASDAQ®) will offer MOPB, an alternate MOPP-like routing strategy for firms seeking to sweep protected quotes before printing to the Trade Reporting Facility TM (TRFTM). Like the existing MOPP strategy, MOPB will route to top-of-book quotes as stipulated by Reg NMS. Unlike MOPP however, MOPB orders will be cancelled immediately (without executing) if the MOPB order's quantity is insufficient to clear the protected quantity across all Reg NMS destinations. Additionally, any unexecuted shares of MOPB orders will be cancelled after sweeping the market and will not post on NASDAQ.

Which order protocols support the new MOPB strategy?

NASDAQ has updated the following protocol specifications to reflect these new strategies:

  • INET FIX
  • RASH

What is the pricing for orders using the new strategy?

Pending Securities and Exchange Commission (SEC) approval, pricing for the execution of orders using MOPB will be as follows:

MOPB
Fee to Remove Liquidity on NASDAQ Standard rates
Fee for Orders Executing on NYSE $0.0027
Fee for Orders Executing on Other Destinations $0.0035

Can I trade all U.S. equities using this new strategy?

Like all NASDAQ routing strategies, MOPB is eligible for trading in all Reg NMS securities.

How will I know where the order executes?

The following liquidity codes will identify where a trade executes when using the MOPB strategy:

Execution Venue MOPB
NASDAQ R, m
BX B
PSX P
NYSE D
Other X

Where can I find additional information?


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