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Tuesday, August 29, 2017

Equity Trader Alert #2017 - 180
Exchange Coordinated Contingency Closing Auction Scenario Testing

Category:

  • Testing

Markets Impacted:

Contact Information:

Resources:

On Saturday, September 9, 2017, and Saturday, December 2, 2017, Nasdaq and NYSE Arca (the “Exchanges”) will conduct coordinated tests of contingency closing auction procedures after the conclusion of the previously-scheduled SIP Industry DR and Market Wide Circuit Breaker tests. The contingency closing auction procedures, which are in each of the Exchanges’ rules, provide the process to be followed if a market place disruption prevents the primary listing market from conducting a closing auction. Pursuant to such rules, Nasdaq may designate NYSE Arca, and vice versa, as the alternate exchange for conducting a cross execution to determine the official closing price for its listed securities.

  • On September 9, 2017, the Exchanges will test when Nasdaq designates NYSE ARCA as the alternate exchange for conducting such closing cross execution for Nasdaq-listed securities.

  • On December 2, 2017, the Exchanges will test when NYSE Arca designates Nasdaq as the alternate exchange for conducting such closing cross execution for NYSE Arca-listed securities.

The contingency closing auction testing will commence at noon. On September 9, 2017, all Nasdaq-listed symbols will be available for testing. On December 2, 2017, all NYSE Arca-listed symbols will be available for testing.

The timeline for the September 9, 2017 test is as follows:

12:00 pm Nasdaq systems will cease operating and declare that it is unable to conduct a closing crossing.
12:00 – 1:00 pm NYSE Arca will accept on close orders for Nasdaq listed securities. Firms are encouraged to participate by sending on close orders
1:00 pm NYSE Arca will conduct a closing cross execution for eligible securities and SIP will publish closing prices.

Firms are encouraged to participate to ensure future readiness by directing orders to the designated alternative Exchange for each testing date. For additional information, the Nasdaq Trade Desk at 212 231-5100.

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