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This topic includes information and reporting requirements related to options orders.
On Wednesday, July 21, 2021 at 4:15 pm ET, Consolidated Audit Trail, LLC and FINRA CAT, LLC will host an industry webinar focused on the CAT reporting requirements for Multi-Leg/Complex Option orders.
Please note that FINRA CAT, LLC utilizes Zoom to conduct industry webinars. Please check your firewall to ensure your firm has the ability to view Zoom content. If you are unable to download and run Zoom, please click the “join from your browser” link. This webinar will be recorded. The presentation document and recording will be posted.Audio file
The CAT NMS Plan requires the trade event to be reported with the “time of execution”. Each exchange has different rules governing open outcry trading on the exchange floors. Thus, the eventTimestamp should be the execution time as recognized per the rules of the exchange on which the trade was executed.
- FAQK16. How must Industry Members capture the firmDesignatedID (“FDID” or “Firm Designated ID”) on Multi-Leg events in scenarios where the equity leg and option leg are originated in and/or settled to different accounts of the same customer?
In a scenario where a customer sends a complex order, and that customer has different accounts for the options and equities activity, the Industry Member must capture the FDID on the Multi-Leg New Option Order event (“MLNO”) with the FDID of the account in which the options portion of the multi-leg order is handled.
- FAQK18. Is an electronicTimestamp required when reporting a manual Trade Event (MEOT) or manual Option Trade Event (MOOT) to CAT?
No. The electronicTimestamp field is not required when reporting manual trade events for options or equities. The timestamp for electronic capture of the trade is provided on the corresponding trade event reported by the TRF or the exchange.
- FAQK12. The concept of selling long or short is not applicable to options. How should the side field be populated on options events for a sell order?
In Phase 2b, the Industry Member may populate any of the side values applicable to sell orders (i.e., SL, SS, SX). Starting in Phase 2d, the only value applicable to options sell orders is 'S'.
- FAQK6. When an Industry Member receives a simple electronic order in Listed Options and solicits interest in the execution of the order, are the solicitation and the responses to the solicitation reportable in Phase 2b?
Suppose that an Industry Member receives a simple electronic order for a Listed Option. The Industry Member then engages in a solicitation process to identify a contra party to pair the order against for execution on an exchange, and one or more market participants respond to the solicitation of interest. The Industry Member selects one or more of the responding market participants’ order(s) to execute against the original order, and sends a paired order(s) to an exchange for execution.
To provide flexibility, CAT will accept the net price of a multi-leg strategy order as either a “per unit” amount, “total strategy” or “total cash” amount.
In most cases, a multi-leg strategy is represented with the leg ratios in their simplest form, and the order quantity representing the number of strategy “units” the customer or firm is looking to execute. The “per unit” price represents each set of legs as defined in the CAT MLEG record.
- FAQK8. When an Industry Member receives a complex order including an equity leg and solicits interest in the execution of the order, are the equity leg component of the solicitation and the responses to the solicitation reportable in Phase 2a?
Suppose that an Industry Member receives a complex order including an equity leg. The Industry Member then engages in a solicitation process to identify a contra party to pair the order against, and one or more market participants respond to the solicitation of interest. The Industry Member selects one or more of the responding market participants’ order(s) to execute against the original order and sends a paired order(s) to an exchange for execution.
Section 6.4(d)(iii) of the CAT NMS Plan, which describes the exemption for Options Market Maker quotes, states that “[w]ith respect to the reporting obligations of an Options Market Maker with regard to its quotes in Listed Options, Reportable Events required pursuant to Section 6.3(d)(ii) and (iv) shall be reported to the Central Repository by an Options Exchange in lieu of the reporting of such information by the Options Market Maker.” Section 6.4(d)(iii) also requires that, pursuant to the Compliance Rules of the Options Exchanges, Options Market Makers are required to report to an Optio
- FAQK14. Is it appropriate to use the 'OPT' handling instruction when an equity order does not become executable until a related option trade has been executed, but is not part of a complex order such as a buy/write?
Orders that are not part of a complex (multi-leg) order but are contingent on the execution of another order must be reported with a handlingInstructions value of ‘CND’ populated on the New Order event. This guidance applies for contingent orders involving just equities, just options or both equities and options.