Tuesday, July 23, 2013

Equity Trader Alert #2013 - 65
NASDAQ Modifies Functionality for Orders Received in Halted Securities via RASH and FIX Protocols, Effective Monday, July 29, 2013

Markets Impacted:

Contact Information:

What you need to know:

  • On Monday, July 29, 2013, NASDAQ will extend its "holding bin" functionality for the RASHport (RASH) and Financial Information eXchange (FIX) order protocols from IPO halts to all halts.
  • The enhanced "holding bin" functionality will be optional and all RASH and FIX ports will be set to the default of holding bin being turned off.
  • If a firm does not enable the holding bin for a port, all orders (except orders for non-NASDAQ securities sent DOT or LIST) received during a halt, including orders in IPO securities submitted prior to the beginning of the quoting period, will be rejected.
  • Members must contact NASDAQ OMX Subscriber Services to enable the holding bin.
  • There will be a testing period available for the new functionality held on Saturday, July 27, 2013.

What is the current "holding bin" functionality?

The current "holding bin" functionality allows members to submit orders in IPO securities with a DAY time-in-force (TIF), beginning at system start up. These orders are held in an un-displayed state until the beginning of the quoting period, at which time they enter the system. Orders held in this manner do not receive time-priority compared to other orders entered at the beginning of the quoting period. Orders in IPO securities with any other "TIF" that are submitted via RASH or FIX order entry protocols are not currently eligible for the "holding bin" and will be rejected. Click here for more information on the current functionality.

What is changing?

On Monday, July 29, 2013 The NASDAQ Stock Market® (NASDAQ®) will make its "holding bin" functionality available for all halted securities, not just those halted due to an IPO. The new functionality will be available on RASH and FIX ports, and will be available regardless of an order's time-in-force. It is important to note that this functionality will be optional and Members can choose on a port-by-port basis whether RASH or FIX orders entered during a halt (including IPO's) should be rejected (default behavior) or enter the holding bin.

When will the system acknowledge orders received by the holding bin?

Orders sent to the holding bin will be acknowledged when they actually enter the trading system, i.e. at the beginning of the quoting period or when trading resumes (in the case of non-NASDAQ listed securities). Firms seeking immediate confirmation that orders submitted into the holding bin have been received by the order entry port should request "pending acknowledgment" messages. It is important to note that if pending acknowledgements are enabled on a port they will be received for all orders not just orders sent to the "holding bin".

If I have the new holding bin enabled, how will orders entered in non-NASDAQ listed securities be handled during a halt?

Orders in non-NASDAQ listed securities sent to NASDAQ during a halt will be held in the holding bin until trading resumes, at which time the order will be acknowledged by the trading system and be available for execution. Orders that are directed to the listing exchange (i.e. DOTA, LIST, etc.) will bypass the holding bin and be sent directly to the listing exchange for handling.

What does my firm need to do?

Firms seeking to use the holding bin functionality should notify NASDAQ Subscriber Services of the RASH and/or FIX ports they would like to enable for the feature. Beginning July 29, 2013, all RASH and FIX ports that have not been explicitly enabled for holding bin functionality at the member's request will be defaulted to reject orders entered during a halt, including orders in IPO securities submitted prior to the beginning of the quoting period.

Where can I find additional information?

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