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Thursday, January 21, 2016

Equity Trader Alert #2016 - 11
Retail Order Process Available Effective February 1, 2016

Category:

  • New Functionality

Markets Impacted:

Contact Information:

Resources:

As detailed in ETA #2015 - 129 and ETA #2015 - 85, Nasdaq will introduce a patent pending Retail Order Process designed to improve market quality for retail investor orders. Nasdaq has received approval for the Retail Order Process, which will be available February 1, 2016.

Retail firms are eligible to enter retail orders for the Retail Order Process once they have submitted a completed Designated Retail Order Attestation Form. Note that firms do not need to resubmit this form if they have already done so.

Retail Order Process Functionality

Firms may designate their orders for the Retail Order Process by marking their orders with “RFTY” in the [ExecBroker field] on FIX or the [Routing Strategy field] on RASHport.

The RFTY strategy will post on the Nasdaq order book if it is not marketable upon receipt. If it is marketable, it will be routed to select destinations for price improvement. If it remains unexecuted after routing to these destinations and the order is still marketable, it will be routed to all other destinations similar to the SCAN routing strategy logic.

Once a RFTY order is posted on the book it will not reroute if it is locked or crossed by a quote on an away exchange. RFTY orders will be routed to the primary listing exchange for participation in Opening, Reopening, Closing and IPO auctions.

Participants may also choose to check the Nasdaq book before routing to the Retail Order Process destinations by designating “QRTY” in the [ExecBroker field] on FIX or the [Routing Strategy field] on RASHport.

Retail Order Process Pricing

The two Retail Order Process strategies are RFTY and QRTY.

All U.S. Equities ($1 and Above) Per Share Executed Liquidity Code
Orders that execute at venues other than Nasdaq Free D, B, P, X, Y, T, F, E, G, U, or S
Orders that remove liquidity on Nasdaq Free R or m
Rebate for orders that add liquidity on Nasdaq $0.0034 e
Executions in Nasdaq Crosses Standard Nasdaq Cross pricing applies

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