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Wednesday, November 9, 2011

Equity Trader Alert #2011 - 53
BX and PSX Announce New Offering of Routing Capabilities

Markets:

Contact Information:

What you need to know:

  • Effective Monday, November 14, 2011, NASDAQ OMX BXSM (BXSM) and NASDAQ OMX PSXSM (PSXSM) will support routing strategies, pending Securities and Exchange Commission (SEC) review of a related filing.
  • Firms will be required to migrate to new RASH/FIX ports that support routing capabilities.

What is changing?

Members will now be able to send routable orders on BX and PSX. This will provide greater flexibility in how orders access liquidity on the BX or PSX book and away markets.

What is the newly supported functionality?

BX and PSX will now support five strategies based on existing NASDAQ routing strategies:

NASDAQ Execbroker New BX Equivalent New PSX Equivalent
SCAN BSCN PSCN
STGY BSTG PSTG
TFTY BTFY PTFY
MOPP BMOP PMOP
CART BCRT PCRT

In addition, members will be able to use discretion and GTC on BX and PSX through the new routable FIX ports, pending SEC review of a related filing.

What are the fees for using the BX router?

Upon launch, fees and rebates for adding and removing from BX will be based on each MPID’s standard rates. The fees per share for routing to away markets will be as follows:

NASDAQ PSX NYSE Other
BSTG 0.0030 0.0030 0.0023 0.0030
BSCN 0.0030 0.0030 0.0023 0.0030
BTFY 0.0030 0.0027 0.0022 0.0005
BMOP 0.0035 0.0035 0.0025 0.0035
BCRT 0.0030 0.0027 N/A N/A

What are the fees for using the PSX router?

Upon launch, fees and rebates for adding and removing from PSX will be based on standard rates. The fees per share for routing to away markets will be as follows:

NASDAQ BX NYSE Other
PSTG 0.0027 0.0027 0.0023 0.0027
PSCN 0.0027 0.0027 0.0023 0.0027
PTFY 0.0027 -0.0014 0.0022 0.0005
PMOP 0.0035 0.0035 0.0025 0.0035
PCRT 0.0027 -0.0014 N/A N/A

Note that using the PSX router’s PSTG or PSCN strategies will allow members to take out all NMS venues at a maximum take rate of $0.0027 per share.

Is there any action that needs to be taken?

Yes. Sending routable orders to BX or PSX will require firms to set up new RASH/FIX accounts and migrate to new ports. Firms can submit a BX Port Request Form or PSX Port Request Form to Subscriber Services.

All firms using RASH, FIX or FIX DROP ports on BX & PSX will need to migrate their ports to the new RASH environment during the next 90 days, regardless of their routing usage.

Which protocols support Routing for BX and PSX?

The following protocols will support routing:

BX Protocols PSX Protocols
INET FIX for BX INET FIX for PSX
Rashport 1.0 & 1.1 for BX Rashport 1.0 & 1.1 for PSX

Please refer to the NASDAQ technical specifications for updates.

Will testing be available?

Firms may test on Saturday, November 12, 2011, as NASDAQ OMX production systems will be available for pre-market trading in all securities at 9:00 a.m., ET. On NASDAQ the pre-market trading is followed by a market open at 9:30 a.m., ET and a market close event will be scheduled for 12:00 p.m., ET. Firms seeking to test must contact Subscriber Services to register for the test and have their ports migrated.

Where can I find additional information?

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Nasdaq (Nasdaq: NDAQ) is a leading global provider of trading, clearing, exchange technology, listing, information and public company services. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business vision with confidence, using proven technologies that provide transparency and insight for navigating today's global capital markets. As the creator of the world's first electronic stock market, its technology powers more than 90 marketplaces in 50 countries, and 1 in 10 of the world's securities transactions. Nasdaq is home to approximately 3,900 total listings with a market value of approximately $13 trillion. To learn more, visit: business.nasdaq.com.

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