Regulatory Obligations
Read frequently asked questions related to regulatory obligations and considerations for trading sessions, including the application of Cboe rules and Reg SHO requirements.
Regarding the inter market linkage and application of trade through/locked-cross prohibition, would Cboe Rules 5.65, 5.66, and 5.67 apply during the new GTH hours?
Cboe rules on this point are the same during GTH and RTH. Cboe systematically prevents locked/crossed markets and will also have inter-exchange linkage available to route marketable orders to better-priced away exchanges, just as during RTH.
Start of day positions must be accurate to correctly calculate short and long positions in support of Reg SHO. If clearing firm files, including contrary assignments, are delayed, start-of-day positions could be impacted, leading to potential mis-marking or other issues. To reduce this risk, has Cboe discussed with the OCC and clearing firms the need to provide all files on the same day?
Yes, Cboe has discussed this with the OCC and market maker clearing firms. Most of those clearing firms have said their systems complete such processing on the current trading day, well before midnight. Cboe's proposed GTH start time of 7:30 a.m. ET was not a concern for most clearing firms. Specifically, for Reg SHO Buy-Ins, in the case of technical issues such as missing data files, clearing firms would typically manually adjust fail allocations. Some have also stated they proactively monitor their fail to delivers intraday on settlement day to address root causes and minimize fail situations. Cboe encourages market makers to have additional discussions directly with their clearing firm on this point.