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Friday, July 13, 2012

Equity Technical Update #2012 - 24
Automatic Re-Entry of Price Slid Orders via OUCH to be Introduced August 2, 2012

Markets Impacted:

Contact Information:

What you need to know:

  • NASDAQ, BX and PSX will implement the automatic re-entry of price-slid OUCH orders, available on an opt-in basis, beginning on Thursday, August 2, 2012.

What is being announced?

NASDAQ, BX and PSX will make available the automatic re-entry of price-slid orders submitted via OUCH, beginning on Thursday, August 2, 2012.

What is Reg NMS price sliding?

Price sliding occurs on all NASDAQ OMX® markets when an incoming, bookable order would lock or cross a protected quote at another market center. Price sliding allows orders submitted at impermissible prices to be booked in a sensible and convenient way.

How does automatic re-entry affect price sliding?

Beginning August 2, members submitting orders through OUCH ports will optionally be able to configure these ports to automatically resubmit their orders when a previously impermissible price becomes available. Previously, OUCH ports would either leave re-priced orders on the book or cancel them back to the member.

Please note: Post-Only orders that are price slid because of NMS interaction and not because of their post-only instruction are eligible for automatic re-entry. Post-Only orders that are slid due to Post-Only restrictions will remain at their slid price.

When an order is automatically resubmitted it will:

  • receive a new sequence number and timestamp to determine time priority;
  • maintain priority among other similarly price slid orders;
  • not be guaranteed time priority over other incoming orders at the same price level.

Why was the enhancement initially postponed?

NASDAQ, BX and PSX filed rule changes with the SEC to clarify the behavior of orders entered at a crossing price versus a locking price via OUCH ports configured for automatic re-entry. While orders entered at a locking price will be slid upon entry and then re-entered as a displayed order when the previously impermissible price becomes available, orders that cross the market will be slid upon entry and cancelled back when the locking price opens up.

How do I sign up for the feature?

Automatic resubmission is selected on a port-by-port basis. Firms may begin the enrollment process immediately by contacting NASDAQ OMX Trading Services at +1 212 231 5180.

Please note: Members who have previously requested this feature for their ports will be contacted to re-confirm their enrollment.

Where can I find additional information?


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