Wall Street Letter VOL. XLV, NO. 35 - Nov. 7, 2013 | Page 4

NEWS

04

counterparties on one side of the
trade in a move to foster competition
to fill a trade, according to a proposal
it submitted to the SEC.
The proposal from the exchange
has been filed in response to requests
from participants that have asked for
the capability, which is already available at the International Securities
Exchange, Phlx said.
The new rule will stipulate that one
side of the order can be more than
one counterparty, but the matching
side must be a single counterparty,
Phlx said.
The exchange said it will also keep
its 1,000 contract minimum (10,000
contract minimum for mini options),
but the minimum will only be in
force for one side of the order.
Phlx said it will allow the capability for its automated and floor-based
QCC orders. The feature will also be
available across participant types.
“The exchange believes that QCC
Orders are used by and needed for all
types of market participants, and this
proposal to permit multiple counterparties would similarly be useful for
all types of market participants.”

legs per day for Arca, it stated in a
footnote of the document. For MKT,
that capacity is 16 million legs across
the day.
In order to enforce the cap, the
exchanges plan to set warning limits
of 40% of total capacity to alert
members they are approaching the
maximum limit. Once a member
submits an order that would result
in a breach of the warning limit, the
member will receive an alert and any
subsequent orders will be rejected until the member requests reinstatement
of its submission capability.
If a member later submits an order
that would result in a breach of the max
limit of 60% of total capacity, the exchanges said any subsequent orders will
be rejected until the next trading day.
Arca and MKT told the regulator

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Arca, MKT to
impose electronic
complex order cap
NYSE Arca and NYSE MKT are
proposing to impose a cap on their
permit holders related to the number
of complex orders submitted to
the exchange in a day, according to
proposals submitted to the SEC last
week.
Specifically, the exchanges said they
would limit permit holders to 60%
of the total capacity of what they call
their complex order table where they
track and rank electronic complex
orders submitted to their respective
order books.
The current total capacity of the
complex order table is 14 million

the volume they handle within their
complex order tables is less than 40%
of total capacity on average across all
participants, so setting a cap at 60%
for individual permit holders should
still allow the exchanges to accommodate the remaining volume.
They also noted the caps are set at
levels such that members are unlikely
to hit them outside of a system error
or inappropriate behavior.
Implementation will come within
60 days after being noticed in a Trader
Update, which will come after approval, Arca and MKT said. The caps could
change, but any changes will also be
flagged up ahead of time, they noted.
Any changes would be temporary and
based on market conditions that could
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