Weekly Roundup of Exchange Rule Changes (by Category) (with Fitzgerald Comment)
New SRO rules and rule proposals were announced by the SEC.
Independent Consultant Shannon Fitzgerald Comment: EDGX Exchange, Inc. ("EDGX") has filed a proposed rule change to add a new order type called the Mid-Point Discretionary Order ("MDO") and to reflect the priority of such MDOs. The proposed rule change was published for comment in the Federal Register on March 25, 2014, but the U.S. Securities and Exchange Commission (the "Commission") has not received any comment letters to date.The Commission has now instituted proceedings to determine whether the proposed rule change should be approved or disapproved in light of certain legal and policy issues raised by the proposal. Specifically, in certain circumstances, an incoming MDO, which functions as a post-only order type, would not interact with a resting non-post-only order, but would interact with an identical later-arriving non-post-only order. The Commission believes the proposed rule change raises questions regarding: (1) whether it is unfairly discriminatory, or inconsistent with the protection of investors and the public interest, for the later-arriving order to have execution priority in these circumstances; and (2) whether it is inconsistent with a free and open market and the National Market System, or the protection of investors and the public interest, for an exchange to create complex order interaction scenarios in order to maintain a simplified fee schedule.This is one of the few substantive proposed rule changes filed by EDGX since the completion of its acquisition by BATS Global Markets Inc. on January 31, 2014.
Click on the links below to view the SEC's notices of exchange rule changes and proposals for the week of June 23 - June 28:
Clearance Settlement
- CME: Effective Immediately - Proposed Rule Change Regarding Collateral Acceptance Practices for Products in the Base Guaranty Fund
- FICC: Order Approving Proposal to Extend the Pilot Program for Certain Government Securities Division Rules Relating to the GCF Repo® Service
Fees Rebates
- CME: Effective Immediately - Proposed Rule Change Regarding Modifications to its OTC IRS Fee Schedule
- Phlx: Withdrawal of Proposed Rule Change to Delete the PHOTO Historical Data Product from Section IX of the Exchange's Options Fee Schedule
Governance
- BOX: Effective Immediately - Proposed Rule Change to Amend Interpretive Material to Rule 5050 (Series of Options Contracts Open for Trading) and Rule 6090 (Terms of Index Options Contracts) to Introduce Finer Strike Price Intervals for Standard Expiration Contracts in Option Classes that also Have Short Term Options Listed on Them
- CBOE: Effective Immediately - Proposed Rule Change Relating to Strike Settings for Mini-S&P 500 Index Options
- ISE: Approval of Proposed Rule Change, as Modified by Amendment No. 2, Regarding the Short Term Option Series Program
- OCX: Proposed Rule Change to Update OCX's Rulebook for Filings Previously Made with the Commodity Futures Trading Commission (see also: Exhibit 4)
Margin Liquidity
Products
- NYSE Arca: Notice of Filing of Amendments No. 2 and No. 3 and Order Granting Accelerated Approval of a Proposed Rule Change, as Modified by Amendments No. 1, No. 2, and No. 3 to List and Trade Shares of Fidelity® Corporate Bond ETF Managed Shares under NYSE Arca Equities Rule 8.600
- NYSE Arca: Notice of Designation of a Longer Period for Commission Action on Proposed Rule Change Relating to the Listing and Trading of Shares of the PIMCO Income Exchange-Traded Fund under NYSE Arca Equities Rule 8.600
- NYSE Arca: Effective Immediately - Proposed Rule Change to Reflect Changes to the Name of, and the Means of Seeking the Investment Objective Applicable to, the PIMCO Real Return Exchange-Traded Fund
- NYSE Arca: Order Approving a Proposed Rule Change Governing the Continued Listing and Trading of Shares of the PowerShares Insured California Municipal Bond Portfolio, PowerShares Insured National Municipal Bond Portfolio, and PowerShares Insured New York Municipal Bond Portfolio
Trading Quotation
- BOX: Proposed Rule Change to Adopt New Trade Allocation Algorithms for Matching Trades at the Conclusion of the PIP and COPIP (see also Exhibit 5)
- EDGX: Order Instituting Proceedings to Determine Whether to Approve or Disapprove a Proposed Rule Change to Adopt a New Order Type Called the Mid-Point Discretionary Order
- ISE: Order Instituting Proceedings to Determine Whether to Approve or Disapprove Proposed Rule Change Relating to Market Maker Risk Parameters
- ISE: Effective Immediately - Proposed Rule Change to Extend the Price Improvement Mechanism Pilot Program
- ISE Gemini: Effective Immediately - Proposed Rule Change to Extend the Price Improvement Mechanism Pilot Program
- NASDAQ: Effective Immediately - Proposed Rule Change to Delay Implementation of the Nasdaq Opening Cross Contingency
- Phlx: Notice of Designation of Longer Period for Commission Action on Proposed Rule Change Related to the Priority Afforded to In-Crowd Participants Respecting Crossing, Facilitation, and Solicited Orders in Open Outcry Trading