Wall Street Letter VOL. XLVI, NO. 1 - January 2014 | Page 14

NEWS

14

or the size traded within a certain
period of time. If those limits are hit,
the exchanges cancel all outstanding
trades in the affected option class and
will reject new trades sent to the market until the participant authorizes
reinstatement.
The proposed functionality will
look for “multiple, successive triggers” of a member’s preset limits, the
exchanges said, which could indicate
“a bona fide problem”.
If a member triggers the mechanism at that threshold, all outstanding orders will be cancelled across
all option classes and all new orders
would be rejected, stated MKT and
Arca. Additionally, members would
be required to authorize reinstatement manually, they added.
“[R]equiring this additional, nonautomated contact will strengthen
the efficacy of the existing Risk
Limitation Mechanisms by providing
dealers with increased sensitivity in
setting risk tolerance and controls,”
they stated.
The number of times the RLM
could be triggered would be set by the
participant with 100 being the maximum, the exchanges noted, adding

the wide range accounts for different
risk tolerances among participants.
POST-TRADE

DTC r aises some
underwriting
service fees
The Depository Trust Company
(DTC) has made changes to some of
the fees it charges for its underwriting
service, in some cases increasing the
fees members will have to pay for
processing, according to a regulatory
proposal from the utility.
DTC will also change the fee
models based on asset class and the
level of processing needed, according to the filing. The utility told the
SEC the changes are intended to align
revenues with costs.
The settlement utility had previously charged a flat fee across all asset
classes for eligibility processing based
on whether the issue was basic or
complex – eligibility processing for
complex issues was priced at $750
per issue. For basic issues, flat fees
were charged for processing a single

CUSIP ($350 per issue) or multiple
CUSIPs ($500 per issue).
Under the new fees, processing for
equity and corporate debt issues will
go to a per CUSIP model – for equity
issues, eligibility processing will cost
members $750 per issue for a single
CUSIP, said DTC. The utility noted
eligibility processing for corporate
debt issues will be $350 per issue for
the first CUSIP. Members will also
be charged an additional $250 per
CUSIP for each CUSIP beyond the
first, it said.
Municipal debt securities submitted
for eligibility processing will also be
assessed tiered fees, but both fees will
be flat, the proposal stated. Processing
for a muni issue with just one CUSIP
will cost $350 but the utility said it
would assess a larger flat fee ($800) for
a muni issue with multiple CUSIPs.
DTC also said it would make
changes to its underwriting processing
fees for book entry only issues (those
that do not stay on the relevant transfer agent’s books) such that members
will be charged $50 per CUSIP up to a
$500 maximum fee per issue.
Fees for eligibility processing for
certificates of deposit will also be

TECHNOLOGY

Redline targets UK for new office

R

edline Trading Solutions is planning to open an office in
the UK to support local clients and co-location centers in
Europe in 2014, according to Mark Skalabrin, CEO.
Mirroring expansions in Hong Kong, and most recently
Chicago, Redline is opening the office to onboard new clients,
provide on-the-ground support for existing ones, and maintain
the network of co-location connections that provide Redline’s
clients with ultra-low latency feeds, Skalabrin noted.
“There has been a big push over the past nine months to expand our exchange coverage internationally, and as we’ve rolled
out our new feeds we are getting new customers hailing from
different regions,” said Skalabrin.
While the UK office is still in the planning stages, Redline is
focusing its efforts towards staffing a new office that will service
clientele located in and around Chicago, according to Skalabrin.

He added that over the next 12 months, the company will add
four to five personnel to the roster in the city.
“We are looking to hire a mixture of people in account sales,
support and engineering who understand trading design, consultancy and deployment of applications,” said Skalabrin. “We
may add a developer in Chicago as well.”
Skalabrin noted that the company’s work in global coverage of
futures and options venues has entailed the company onboarding several new clients, thus sales will make up a substantial
portion of the Chicago team and Redline is sourcing local talent
to fill out these roles.
“There isn’t a requirement from clients for local support, but
we see it as a better way to support customers, by having people
in the time zone that can easily get on site to address issues,”
said Skalabrin.