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This topic includes information and reporting requirements related to options orders.
- FAQK13. If an Industry Member manually initiates a proprietary order and simultaneously enters the order into an OMS/EMS, is this considered a manual event or an electronic event?
Proprietary orders that are simultaneously entered into an OMS/EMS upon origination are always considered electronic. However, in Phase 2b it will be acceptable to report such events as either manual or electronic. Therefore, if an Industry Member has interpreted proprietary options orders manually entered into an OMS/EMS as manual events for Phase 2b, it will be acceptable to treat such events as manual in Phase 2b. Accordingly, if a proprietary order is routed electronically and the Order Route event is reported in Phase 2b, the priorUnlinked flag must be populated.
- 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). A new value applicable to options sell orders will be added for Phase 2d.
- FAQK11. Can an Industry Member choose to report manual option events in Phase 2b, though they are not required until Phase 2d?Yes. While manual options events are not required until Phase 2d, Industry Members may choose to report their manual options activity to CAT in Phase 2b. Industry Members may choose to report all of their manual options order activity, or may choose to report manual options activity on an order-by-order or system-by-system basis. However, as with all data reported to the CAT manual options activity voluntarily reported in Phase 2b must be timely, accurate and complete.
On Wednesday, January 29, 2020, at 4:15 pm ET, Consolidated Audit Trail, LLC and FINRA CAT, LLC will host an Industry Webinar for Industry Member Options Market Makers. This session will include a review of the CAT reporting requirements relating to Options Market Making activity. Additionally, representatives from each of the Participant options exchanges will participate in the discussion and answer any exchange specific questions related to Options Market Maker activity.Audio file
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
- FAQK9. When sending orders to CAT, are Options Market Makers required to mark such orders with an open or close indicator?
Options Market Makers generally are not required to report open/close indicators on orders represented on/sent to an exchange. The CAT NMS Plan states that the open/close indicator does not need to be reported to CAT as part of the material terms of an order for Options Market Maker quotations. However, if exchange rules require an options market maker to include an open/close indicator when submitting orders to the exchange, options makers should submit the indicator for their orders to CAT as well.
- FAQK6. When an Industry Member receives a simple electronic order in Listed Options and solicits interest in the execution of the order, is 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.
- FAQK8. When an Industry Member receives a complex order including an equity leg and solicits interest in the execution of the order, is 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.
On Thursday, August 29, 2019, at 4:15 pm ET, CAT NMS, LLC and FINRA CAT, LLC will host an industry webinar on CAT Options Reporting. This session will be a follow-up to the recent Options Deep Dives.
The event will be held at 4:15 pm ET. Please note that FINRA CAT, LLC is now utilizing Zoom to conduct industry webinars. Please check your firewall to ensure your firm has the ability to view Zoom content. The presentation document and recording will be posted.Audio file