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Wednesday, April 25, 2007

Equity Trader Alert #2007 - 83
NASDAQ to Change Processing for Non-Routable Orders

Please Route To: Head Traders; Technical Contacts; Compliance Officers

What you need to know:

  • Beginning in May of 2007, non-routable orders that would join a locked market will be treated as Price-to-Comply orders and will not display.
  • NASDAQ will communicate additional details and the effectiveness date of this change as they become available.
  • InterMarket Sweep Orders (ISOs) will be unaffected by this change.

Whom you should contact: NASDAQ Market Sales at 800.846.0477

What is changing?
Beginning in May, non-routable orders that are not marked as InterMarket Sweep Orders (ISOs), including those marked as Price-to-Display, will be treated as Price-to-Comply orders if the order would join a locked market. NASDAQ® will communicate the exact effectiveness date as soon as it becomes available.

How do Price-to-Comply orders work?
If a customer sends a non-routable order that would lock or cross the market, including those orders that would join a locked market, NASDAQ will re-price the order and convert it into a non-displayed order. Buy orders will be priced at the inside offer, and sell orders will be priced at the inside bid.

Can I still receive an execution if my order is re-priced and converted to non-display?
Yes. The order remains on NASDAQ’s book as non-displayed liquidity and is executable.

Can I still use the Price-to-Display order type?
Yes. The Price-to-Display order type will continue to be available to customers.

Where can I get additional information?


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