Trade SurveillanceJordan & Jordan’s ECS Software offers firms an all-encompassing view of Reg NMS and other regulatory surveillance requirements in order to improve execution and reduce costs.
Order Protection Rule
The Order Protection Rule (Rule 611) requires any broker-dealer that internalizes trades, or acts as an OTC market maker or block positioner to establish, maintain, and enforce written policies and procedures to prevent trade-throughs of protected quotations.
Reports are calculated in a manner consistent with the provisions of the Order Protection Rule, the FAQs and other forms of guidance issued by the SEC from time to time. Reports include:
- A graphical summary of daily executions identifying all transactions that are compliant, exempt and non-exempt with respect to Rule 611
- A detailed report of all executions including protected quotes available at the time of the trade
- A detailed report of all potential trade-throughs, highlighting protected quotes available at the time of execution.
Regulation SHO Analysis
The SEC’s Short Sale rule is designed to restrict the prices at which a stock can be sold short. If the price of that security decreases by 10 percent or more from the security’s closing price (as determined by the listing market for the security as of the end of regular trading hours on the prior day), a circuit breaker is triggered for that security. With these amendments to the SEC’s Short Sale rule, policies and procedures must be in place to prevent placement or execution of an order that does not comply with the short sale restriction.
Reports are calculated in a manner consistent with the provisions of the Amendments to Regulation SHO (Rule 201), the FAQs and other forms of guidance issued by the SEC from time to time. Reports include:
- A graphical summary of daily executions identifying all transactions that are marked SS (Sell Short) or SSE (Sell Short Exempt).
- A detailed report of all stocks for which the 10% Circuit Breaker (“CB”) has been triggered or is in effect.
- A detailed report of all executions marked SS that are in compliance (no CB in effect).
- A detailed report of all executions of orders marked SS that are not in compliance (where CB is in effect and there is no indication of a price one tick above national best bid (“NBB”)).
- A detailed report of all executions marked SSE that are in compliance, noting exemption reason or indicating that price was one tick above NBB.
- A detailed report of all executions marked short sale exempt (“SSE”) that are not in compliance, when no exemption reason has been noted or if price is not above NBB in effect, based on Network data.
Limit Up-Limit Down
Under the Limit Up-Limit Down rule, all market participants are required to establish, maintain, and enforce written policies and procedures that are reasonably designed to prevent trading outside the upper and lower limit bands, when such bands are in effect. Additionally, firms are not allowed to execute orders during any trading pauses in effect due to Limit Up-Limit Down.
The ECS LULD module analyzes what percentage of your firm’s transactions occurred inside, at, and outside the upper and lower price-bands in effect at the time of the execution. In addition, for a security at a given time in the trading day, the upper and lower price-bands, if any, may be displayed.