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Frequently Asked Questions
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Table of Contents
GENERAL INFORMATION
CONNECTING TO PHLX XLE
TRADING HOURS, ORDER TYPES & ORDER HANDLING
ROUTING
QUOTE MANAGEMENT
LOCKED & CROSSED MARKETS
MARKET-MAKING
FEES
MEMBERSHIP/PERMITS
CLEARING
MARKET DATA
CONTACTS
GENERAL INFORMATION
What stocks trade on PHLX XLE?
PHLX XLE offers fully electronic trading in NYSE, AMEX and NASDAQ
listed securities.
How are orders reflected in the National Market System
(NMS)?
Upon receipt, PHLX immediately disseminates anonymously the price
and round lot size of any order not immediately routed or executed
in PHLX XLE. Quotes will be disseminated as a PHLX quote to the
CQ and UTP SIP’s as an aggregated Level 1 quote.
Does PHLX XLE protect the identity of its participants?
PHLX XLE is designed to provide trade date and post trade date
anonymity for all of its participants. While contra side identities
are utilized by Exchange personnel in the performance of their
administrative and regulatory oversight duties, those identities
are not revealed to participants unless required by a court or
an arbitrator or if Stock Clearing Corporation of Philadelphia
(SCCP) or NSCC cease to act for the clearing firm involved in
the trade. The PHLX XLE Help Desk may use the identity of a PHLX
participant to facilitate problem resolution.
What is the policy on sub-penny trading on the PHLX?
In PHLX XLE, sub-penny quoting up to four decimal places will
be supported for limit orders priced under $1.00, and certain
products that may be given an exemption by the SEC for sub-penny
orders of $1.00 or greater. The actual order price will become
the quote; no rounding or truncation will be performed.
Will there be a centralized help desk?
Yes, the PHLX XLE
Help Desk services all customers regarding clearly erroneous
disputes, problem resolution, trade query, and all customer issues
in a real time environment.
CONNECTING TO PHLX XLE
How do I connect to PHLX XLE?
Member organizations or organizations sponsored by members who
meet the PHLX requirements may connect directly or through a network
service provider.
Is a separate line needed if you are already connected
to PHLX XL?
You can use the same line if you are connected to trade options
on PHLX XL but you must write to the PHLX XLE API.
What PHLX XLE specifications are available?
The PHLX XLE FIX API specifications are available on the PHLX
Website at www.phlx.com
or www.phlx.com/ETS/phlxxle.html.
The available documents are:
· PHLX XLE Fix Specification and API
· PHLX XLE Depth of Book Interface Specification
What protocol does PHLX XLE support for order submission?
PHLX XLE supports FIX 4.2. It does not support CMS.
Can I connect via the Internet?
No, while we anticipate doing so in the future, at this time PHLX
does not offer Internet connectivity for production applications.
Firms can however test with PHLX using a VPN, or Internet connectivity.
Is there any connectivity or testing costs?
At this time, PHLX is not charging for connectivity or testing.
What are the capacity benchmarks of PHLX XLE?
PHLX XLE is deployed on the same Stratus/Sun architecture as the
PHLX XL options trading system and is designed for dynamic load
balancing and horizontal expansion. Capacity benchmarks significantly
exceed those of both the Nasdaq UTP and Consolidated Tape Association
Security Information Processors (SIPs).
For more information on connectivity, contact the PHLX Technical
Account Management Group at 215-496-5310 or via email at qatamg@phlx.com.
TRADING HOURS, ORDER TYPES & ORDER
HANDLING
What are the trading hours?
Trading occurs during three distinct and specific sessions*:
Pre Market 8:00 am - 9:30 am
Core 9:30 am - 4:00 pm
Post Market 4:00 pm - 6:00 pm.
*Hours are Eastern Time.
What is available in the Pre-Market Session?
All available order types are valid during the Pre Session. Orders
entered in the Pre- Market can also be ascribed to the Core session
and will continue to trade into the Core Session. Orders valid
through the Post Market Session can also be entered during this
session. PHLX XLE will not accept or queue orders before the beginning
of the Pre-Market session.
Core Session
Orders valid for both the Core Session only and the Core and Post
Market Sessions will be accepted during this period. These orders
are also immediately eligible for quoting and trading upon arrival.
Post Market Session
This session begins when the Core Session closes, usually 4:00
pm Eastern Time for most stocks and 4:15 pm Eastern Time for some
ETF products, and ends at 6:00 pm Eastern Time. Only orders valid
for the Post Market Session will be accepted during this timeframe.
These orders will be eligible for quoting and trading at that
time.
Do orders expire at the end of the trading session?
Yes, an order specified for a particular session will automatically
expire at the end of that session. Pre-Market Session orders expire
at 9:30 am Eastern Time. Orders marked Core expire at the close
of the Core Session. Post Market Session orders expire at 6:00
pm Eastern Time.
What time-in-force instructions does PHLX XLE accept?
PHLX XLE accepts Day and IOC orders only and will not accept GTC
orders. All orders remaining on the PHLX book at the end of the
Post Market Session are cancelled.
What types of orders are accepted?
PHLX XLE will support the following order types and conditions:
· Limit
· Immediate or Cancel (IOC)
· Single Sweep Order (SSO)
· Intermarket Sweep Order* (ISO)
· Reserve
· Pegged
· IOC Limit Cross
· Midpoint Cross
· Odd Lots (PHLX XLE is an actual shares system)
· Mixed Lots (PHLX XLE is an actual shares system)
The complete definition of valid PHLX XLE order types can be
found in the proposed PHLX XLE Rule 185- Orders and Order Execution.
*Offered consistent with the implementation
of Reg NMS
Orders may have the following attributes:
· Pre-Market
· Core
· Post Market
· Do Not Route
· Short Sale
· Short Sale Exempt
What is the priority of orders on PHLX XLE?
Limit Orders, the display portion of Reserve Orders and Pegged
Orders (including odd-lots) shall be ranked, as a group, based
on the receipt time, or price update time, of each order; followed
by the undisplayed portion of Reserve Orders ranked on the time
each such order’s display portion price is received or updated.
Is non-displayed interest reflected in the Depth of Book
feed?
PHLX does not have a non-displayed order type. The reserved portion
of a reserved order is not disseminated in either the Level 1
quote or in the Depth of Book data feed.
How will Intermarket Sweep Orders be handled?
During all sessions, inbound Reg NMS Intermarket Sweep Orders
(ISO) will execute at the PHLX without regard to the NBBO. PHLX
XLE will not prevent matches from trading through non-protected
quotes based on an ISO instruction. PHLX may implement ISO’s
differently during a pre-Reg. NMS launch.
Does the PHLX support crossing and preferencing opportunities
for participants?
Yes, within PHLX XLE, firms may cross orders with and for their
customers. PHLX will offer a firm the ability to preference certain
cross orders. All order protection rules must be adhered to when
preferencing. Displayed public agency orders to buy or sell at
a particular price have priority, in accordance with price/type
time logic over all cross orders on PHLX XLE. If no public agency
order exists within the PHLX XLE Book at that price, PHLX XLE
will permit an Approved Dealer to enter an IOC Limit Cross Order
to execute without interacting with existing broker/dealer or
proprietary interest.
Will the Exchange be able to continue to offer agency
brokerage for institutional and other professionally placed orders?
The PHLX will continue to support agency brokerage for the institutional
clients of member firms and their orrespondents. Agency brokers
will be able to set up agency crosses using the PHLX order entry
terminal much the same way as today.
ROUTING
How will the PHLX handle its outbound routing?
The ability to facilitate outbound routing service is an essential
part of the new PHLX electronic equities market structure. OES
Holdings LLC will provide the facility broker-dealer, named PRO
Securities LLC, with the outbound routing technology, technical
and operational services, and order audit trail compliance tools
to the PHLX to meet Regulation NMS requirements. It is the policy
of the PHLX to provide an optional outbound routing mechanism
for orders that would receive a better price at another marketplace
than if executed on PHLX XLE. To ensure the best possible service
for PHLX participants, PHLX will utilize private linkages to access
all market centers. Participants may choose our default router,
or as available, other PHLX approved vendors of their choice.
Should a participant not wish an order to be considered for routing
using the PHLX facility, the order must be marked “Do Not
Route.”
How do I choose an alternative routing vendor?
An alternate outbound router must be approved by the PHLX and
be connected to PRO Securities in order to participate. Approved
alternate routers may be selected by a participant during the
participant’s registration process or upon written notification
to the PHLX. Participants wishing to use an alternate router that
has not yet been approved should contact the PHLX to initiate
the approval process.
What outbound order handling will the PHLX provide?
Initially, PHLX will only offer a “single fire” Quote
Management Instruction that will access the displayed interest
on an away market one time for an order. A “re-fire”
order logic will be available shortly after the initial PHLX XLE
launch to allow repeated routing to superior displayed interest
until either the order is exhausted or the away market(s) withdraws
its bid(s) or offer(s).
Do you only route during the core session?
No, orders are eligible for routing in any session to any away
markets quoting Protected Quotations and trading at that time.
What happens to the Intermarket Trading System (ITS)?
PHLX will continue to be accessible as a destination for market
centers utilizing ITS. All inbound orders or ITS Commitments from
other market centers will be processed as IOC (ISO) orders. PHLX
will not participate in routing outbound through ITS.
QUOTE MANAGEMENT
What are the Quote Management Instructions?
Quote Management Instructions (QMI) allow customers to determine
how their quotes (orders) will be managed for any marketable order
received. This functionality forms the foundation of PHLX’s
effectiveness at managing a customer’s quoted order in a
Reg. NMS environment. A QMI setting will determine how marketable
limit orders are quoted, as well as routed away, in the market.
What are the QMI options?
Ship and Quote
Upon the arrival of an order, PHLX XLE will execute immediately
and automatically against existing orders in PHLX XLE at their
displayable price, in the order of their ranking, and route orders
to any away Protected Quotations, to the orders limit price. If
the order arrives during a time when a Protected Bid is priced
higher than a Protected Offer, then PHLX XLE will not route orders
to any away Protected Quotations. In either case, remaining shares
in the incoming order will be displayable on PHLX XLE at the order’s
limit price.
Post Order and Participate (POP)
Upon the arrival of an order, PHLX XLE will execute immediately
and automatically against existing orders in PHLX XLE at their
displayable price, in the order of their ranking, to the price
of the best away Protected Quotation and route orders to away
Protected Quotations priced at the best away Protected Quotation.
After PHLX XLE receives responses to such orders that were routed
away, PHLX XLE will repeat this process by continuing to route
orders to away Protected Quotations priced at the best away Protected
Quotation until the incoming order is executed in its entirety
or its limit price is reached. During this time, any unexecuted
and un-routed shares of the incoming order will be displayable
on PHLX XLE at $.01 away from the best Protected Quotation on
the opposite side of the order.
When do I define my PHLX XLE Participant Settings?
Participants will be asked to define their participant settings
as part of the connection and testing process. The Technical Account
Management Team will discuss participant settings during this
time.
Can a QMI be changed in an order instruction?
No, participants are required to choose a default QMI style prior
to the initiation of order delivery to PHLX XLE. These defaults
cannot be overridden with order instructions; rather the PHLX
XLE Help Desk can change the default intra day. Any change in
the instruction will apply to new orders only.
LOCKED & CROSSED MARKETS
What is the PHLX trade through policy?
PHLX XLE is designed to not allow trade-throughs. Generally speaking,
if a displayed market, identified by PHLX as an automated market
away, is superior to a PHLX bid or offer, PHLX, at the participants
direction, will either route to that market or re-price the order
to avoid initiating a locked or crossed market. PHLX will only
lock or cross a market after it has attempted to clear the away
market or if a crossed market already exists between two or more
markets. The handling of your order in trade-through and lock/cross
market scenarios is determined by your Quote Management Instruction.
How will my order be handled in a locked market?
If PHLX XLE receives an order that would lock a market, it will
automatically route the portion of the order required to clear
the away market(s) and post the balance at either the orders limit
price (Ship and Quote QMI), or at the locked price and dynamically
update and re-fire (POP QMI). If another market locks PHLX, the
Exchange will not route resting interest to the locking market.
Subsequent orders at that price will increase the PHLX size at
that price. If a participant has indicated to PHLX that it does
not wish its order routed, PHLX will re-price and post at the
minimum increment to the locked NBBO.
How will my order be handled in a crossed market?
If PHLX XLE receives an order that would cross a market, it will
automatically route the portion of the order required to clear
the away market(s) and post the balance at the order’s limit
price (Ship and Quote QMI). If the market is crossed, PHLX will
not route. Orders received with a Ship and Cross quote management
setting during a crossed market will either be posted on PHLX
XLE or be executed against resting PHLX XLE interest for the period
of the cross.
With a POP QMI, PHLX XLE will never create a crossed market.
If another market crosses PHLX, the Exchange will not route resting
interest to the crossing market. Subsequent orders at that price
will increase the PHLX size at that price. If a participant has
indicated to PHLX that it does not wish its order routed, PHLX
will re-price and post at the minimum increment to the crossed
NBBO.
Market-Making
Will PHLX XLE support Market-Maker functionality?
Yes. While it is not required to have a Market Maker for a stock
to be available for trading on PHLX XLE, a participant may register
as a Market Maker for the purpose of providing liquidity in stocks
selected by the Market Maker, subject to approval by the PHLX.
Market Makers are allowed to enter all order types within PHLX
XLE. Market Makers will also be allowed to post multiple orders
in the same security on the same side of the market.
What are the requirements to be a Market Maker?
Market Makers must register and be approved by the PHLX and establish
an account (or have their clearing firm establish an account)
with the Stock Clearing Corporation of Philadelphia (SCCP). The
Market Maker is required to make continuous two-sided markets
between 9:30 am Eastern Time and 4:00 pm Eastern Time (or 4:15
pm Eastern Time for certain ETFs) for any stock in which they
have been registered.
Will a Market Maker be allowed to accept directed order
flow or provide price improvement?
No, PHLX does not allow this opportunity currently, but is anticipating
offering this feature in the future. Participants will be notified
of that opportunity in advance of its availability
FEES
What is the fee structure for executions on PHLX XLE?
Executions on PHLX XLE are subject to the PHLX fee schedule that
will be posted on our Website. In general, for those entering
single sided orders, we expect the fee schedule to be a maker/taker
schedule with volume-based discounts going from the widest spread
for the lowest volume tier gradually narrowing tiers for the higher
volumes. Cross orders are anticipated to be on a separate schedule,
as will agency crosses.
Is there a fee for routing?
Yes, PHLX will charge a fee for all routed orders. For those using
the default router, it is anticipated to be one set fee. For those
utilizing an alternative access broker, we anticipate a small
handling fee with the participant being responsible for all fees
charged by the access broker, service bureau, executing market
center (including those associated with clearing) and the SEC
when applicable.
Are there other fees?
PHLX will always strive to be a low cost provider for execution
services. Our new fee schedule will reflect all charges, including
any periodic charges associated with membership and other specific
services.
For more information on fees, contact Tom Kelly at 215-496-6721.
MEMBERSHIP/PERMITS
Does a permit get access to NYSE, NASDAQ and other Exchange
issues?
Holders of a PHLX Series A-1 permit may trade all issues eligible
for trading on PHLX including those listed on NYSE, Nasdaq and
other Exchanges.
Are permits the same for Market Makers and customers?
Yes, a Series A-1 permit is issued to all PHLX Members who register
to trade Equities, and to Market Makers and allows trading in
all stocks listed or traded on PHLX XLE. Market Makers will require
an additional PHLX registration.
Are there limits placed on the number of stocks that
can be traded on a single permit?
Participants are not restricted to the number of stocks that they
can place orders on or trade on PHLX XLE.
For more information on Membership and Permits, contact
Robert Kreszswick at 215-496-5109.
CLEARING
How is clearing handled on orders executed on PHLX XLE?
Once a trade has been executed, records will be sent to National
Securities Clearing Corporation (NSCC) for clearance and settlement
via the PHLX clearing subsidiary, Stock Clearing Corporation of
Philadelphia (SCCP). All trading activity is transmitted to NSCC
via computer as "locked in" transactions; meaning a
computer has already matched the details of the trades from the
buyer and seller. Trades executed will be routed to NSCC for settlement
via the Regional Interface Organization (RIO). The trades will
be reported to NSCC on an anonymous basis so the contra-party’s
identity is not revealed.
How is clearing handled on orders routed to other market
centers for execution by PHLX XLE?
The same as orders executed on PHLX XLE. Executions from routed
orders will be sent to NSCC for settlement via the Regional Interface
Organization (RIO). The trades will still be reported to NSCC
on an anonymous basis so the contra-party’s identity is
not revealed. This is the same as if the execution occurred at
the PHLX.
What clearing arrangement must a customer make to trade
on PHLX XLE?
It is necessary for clearing firms to become Members of SCCP to
clear trades on behalf of exchange participants. For example,
broker/dealers that are self-clearing and want direct access to
PHLX XLE are required to register as Participants of PHLX and
must become members of SCCP. If not self-clearing, the broker/dealer
must provide the name and NSCC account number of the entity providing
clearing services to the applicant. For PHLX XLE Participants
that utilize a clearing firm that is an existing SCCP member,
they can elect a sponsored membership to SCCP via a Trade Give-up
Agreement. SCCP members are required to contribute to SCCP’s
Participant Fund, a refundable monthly deposit amount of $10,000
- $75,000 depending on trading volume.
For more information on clearing, contact Everton McLennon
at 215-496-5095.
Market Data
What type of market data does PHLX provide?
PHLX market data is available from the SIP (Level 1 data) and
directly from PHLX (Depth of Book data).
Does PHLX offer Depth of Book?
PHLX will offer a separate feed, PHLX XLE Depth of Book, which
will anonymously reflect every displayable order within the PHLX
XLE.
Is there an open order file sent to customers daily or
upon request?
No. While customers can view their open order file during the
day, PHLX intends to provide an activity report at the close of
the post trading session daily.
Is there a real-time risk management feed sent to clients?
No, firms may query the status of orders real-time. Contact the
PHLX if your firm requires this type of feed.
Will the PHLX offer a Trade Reporting Facility (TRF)
for its Participants?
PHLX is currently considering how to best offer that opportunity
for PHLX Participants.
PHLX XLE
Contacts
Connectivity
Technical Account Management Group
215-496-5310
qatamg@phlx.com
Fees
Thomas Kelly
Vice President, Financial Services
215-496-6721
thomas.kelly@phlx.com
General Information
Bob Miller
Senior Advisor to the Exchange
215-496-5181
robert.miller@phlx.com
Paul Roland
Director of Project Management
215-496-5342
paul.roland@phlx.com
Membership Services
Robert Kreszswick
Director, Membership Services
215-496-5109
robert.krezszwick@phlx.com
Rules
John Dayton
Director & Counsel
215-496-5162
john.dayton@phlx.com
Systems Development
Alan Kurlansky
Director, Equity Trading Systems
215-496-5287
alan.kurlansky@phlx.com
XL Operations Service Center
William Terrell
First Vice President, Trading Floor Operations
215-496-5205
bill.terrell@phlx.com
Marketing
Barry Nobel
Vice President, Marketing
215-496-5026
barry.nobel@phlx.com
Stock Clearing Corporation of Philadelphia (SCCP)
Everton McLennon
Vice President
215-496-5095
everton.mclennon@phlx.com
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