(New) Solicited Transactions
In sum, Cboe Options Rule 6.9, Solicited Transactions: (i) sets forth priority for solicited transactions on the Exchange; and (ii) prohibits Trading Permit Holders (“TPH”) and associated persons from trading based on knowledge of an imminent undisclosed solicited transaction. This Circular is intended as a quick reference guide. Please refer to the Rule for additional information.
• Cboe Regulatory Options Circular RG18-028 (August 24, 2018): Solicited Transactions
CBOE restates its policy concerning prearranged trading. Trading Permit Holders are cautioned that any purchase or sale, transaction or series of transactions, coupled with an agreement, arrangement or understanding, directly or indirectly to reverse such transaction, which is not done for a legitimate economic purpose or without subjecting the transactions to market risk, violates CBOE rules and may be inconsistent with various provisions of the SEA and rules thereunder. All transactions must be effected in accordance with applicable trading rules, subject to risk of the market, and reported for dissemination.
• Cboe Regulatory Options Circular RG18-023 (July, 2018): Prearranged Trades
Modified HOSS Opening Procedures and Special Opening Quotation and Settlement Methodology
This regulatory circular is being has been issued to: (1) update content and a hyperlink to the section describing the narrowed Opening Exchange Prescribed Width (OEPW) and Acceptable Price Range (APR) parameters; and (2) update the section describing the dissemination of Expected Opening Information (EOI) messages published to Cboe Option’s website. Specifically, the time interval for dissemination of EOI messages published to Cboe Option’s website has been reduced from 15 seconds or less to approximately every 6 seconds during the pre-open state. The time interval for dissemination of EOI messages over Cboe Options’ APIs occurs approximately every 5 seconds during the pre-open state. Effective Monday, July 9, 2018, Cboe Options introduced the Cboe Opening Auction Feed which will provide market participants with a view of auction information over a separate multicast market data feed delivered through the Cboe CSM platform.
• CBOE Options Regulatory Circular RG18-018 (June 15, 2018): Modified HOSS Opening Procedures and Special Opening Quotation and Settlement Methodology for Volatility Index Derivatives and Risk Inherent in Settlement Procedure
Best Execution Rule
In light of the increasingly automated market for equity securities and standardized options, and recent advances in trading technology and communications in the fixed income markets, FINRA reiterates the best execution obligations that apply when firms receive, handle, route or execute customer orders in equities, options and fixed income securities. FINRA reminds firms of their obligations, as previously articulated by the SEC and FINRA, to regularly and rigorously examine execution quality likely to be obtained from the different markets trading a security.
• FINRA Regulatory Notice 15-46 (November 2015): Guidance on Best Execution Obligations in Equity, Options and Fixed Income Markets