Wall Street Letter VOL. XLVI, NO. 1 - January 2014 | Page 13

JANUARY 2014

The exchange added that firms not
using LINE or not complying with
brokerage risk limits can be blocked
from trading or throttled, among other penalties. The exchange could also
hit brokerage firms with additional
collateral requirements, according to
the circular.
The implementation deadline is
February 3, 2014.
TECHNOLOGY

Hoyos Labs launches
iris recognition
security app
Hoyos Labs will launch an app for
android and IOS markets centered on
the biometric facial and iris recognition
security solution aimed at protecting a
trader’s platform from malicious users,
according to Hector Hoyos, CEO.
The newly minted digital infrastructure security company offers an
application that works via smartphone
to confirm facial and iris recognition
of a user before allowing them to connect to the trading platform of a firm,
Hoyos noted in an interview with
WSL. The vendor will launch it in the
market this year, he added.
“The application facet of the endto-end biometric solution will be
released for markets in the first quarter of next year for both iPhone and
Android markets,” said Hoyos. “We
are working with a couple of finance
institutions, where the application in
those cases would provide security to
high-net-worth companies by securing execution and access to data.”
The function sweeps away the need
for passwords and logins and instead
uses a person’s eyes and face to confirm identity, Hoyos explained.
He noted encryption and recognition technology for the face and
irises are not new. The application
leverages existing recognition tech,
but what differs is the intuitive functionality and ease of deployment, said
Hoyos, adding it requires nothing

more than an end user’s smartphone
once the offering is integrated into a
company’s infrastructure.
“Currently, IT departments have
to change passwords on a weekly
or monthly basis and have multiple
systems and different passwords for
each. People may not remember them
and it is costly to be dependent on a call
center to reset passwords,” said Hoyos.
“With this technology we do away with
usernames and passwords as you are
your username, password and pin.”
EXCHANGES & ATSs

LSE to amend IOB
trading hours,
reinstate size
requirements
The London Stock Exchange plans
to make changes to its trading
hours and reinstate a minimum size
requirement on certain securities on
its International Order Book (IOB),
according to a consultation document
the exchange distributed last month.
The IOB, which provides a venue
for depositary receipts trading, currently opens its regular trading day at
8:15 AM London time, with an opening auction that starts at 8 AM.
LSE noted it wants to move the open
to 8 AM to align the open with SETS,
its electronic order book. The opening
auction would be five minutes shorter
(though subject to extensions) and
would begin at 7:50. The new timing
would be implemented on February 1.
The exchange also plans to reinstate minimum orders sizes for the
IOB market, but only for certain
securities. LSE noted a minimum
order size requirement of 50 depositary receipts across all securities was
removed in 2010.
But the exchange now wants to add
a requirement to improve liquidity
for less liquid issues. It said the minimum order size requirement would
be applied to new resting orders.

Aggressive orders executing immediately would not be affected.
LSE said it would also limit the
ability for orders to set the best bid or
offer to passive orders sized to a pre-set
percentage of the exchange market size.
The exchange asked for comments
on all the changes, including asking
whether it should also amend the
closing time for IOB in addition to
changing the open.
LSE noted it would also make
changes to its tick size requirements to
align tick sizes for FTSE 100 stocks on
SETS and IOB, and it will also change
its rules to accommodate the planned
move to a shorter settlement time.
Comments on the consultation
were due by December 27.
EXCHANGES & ATSS

Arca, MKT add
functionality to
RLM
NYSE Arca and NYSE MKT plan
to add functionality to the Risk
Limitation Mechanism (RLM)
offered to members in an attempt to
differentiate between what could be a
minor breach of risk tolerances and a
potential systemic failure, according
to proposals from the venues
submitted to the SEC.
Arca and MKT have offered the
RLM to its participants, including
market makers who are required to
use the functionality for all quotes, to
help participants monitor executions
across different option classes.
The changes, which would include
requiring a non-automated response
when pre-set execution thresholds
are triggered, would use essentially
the same method of counting trades
submitted to the exchange as an
indicator of when the more stringent
thresholds have been triggered, they
stated in the filings.
Existing functionality allows participants to set a limit for the number
of contracts, the number of traders,

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