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E. Order Routing and Execution
This topic includes information and reporting requirements related to order routing and execution.
- EventAudio file
- CAT Alert
- FAQE28. Exchange origin code is required to be reported on CAT Order Route events when routing orders to an options exchange. However, it is not required by all options exchange protocols for certain market maker orders. In these cases, with what should Industry Members populate the exchOriginCode field on the Options Order Route Event?The exchOriginCode field is a required text field on the CAT Options Order Route Event (“MOOR” event) and CAT will reject the record if the field is not populated. In instances where the market maker sends a market maker order through an options exchange protocol that does not require an exchange origin code, Industry Members must populate the exchOriginCode with “MM.”
- FAQE13. Is a firm that routes an order away from the firm for execution required to report routing instructions (e.g., specific order types and terms and conditions used for the order when sending to an exchange) to CAT in the handlingInstructions field on the CAT Order Route Event?
A. Yes. In CAT, routing instructions must be reported by the routing firm in Phase 2c. If the routing instructions are the same as the instructions received by the firm, then the firm may populate the handlingInstructions field with the value “RAR” (Routed as Received).
The only exception to this requirement is the “OPT” handling instruction, which must be populated on Order Route events representing the equity leg of a complex option with a net price beginning in Phase 2a. Refer to FAQ B12 for additional information.
- FAQE2. Are Industry Members required to report to the CAT the routing of an order if the routed order is rejected by the Industry Member or Participant to which the order is routed?
If the Industry Member routes an order to another Industry Member or a Participant, the Industry Member must report the routing of the order to the CAT. The details that must be reported for the routing of an order are set forth in Section 6.3(d)(ii) of the CAT NMS Plan, as applied to Industry Members by Section 6.4(d)(i) of the CAT NMS Plan.
- CAT Alert
- FAQE3. BD A, an Industry Member CAT Reporter, receives a customer order for 10,000 shares and subsequently routes 2,000 shares of the order to Exchange A, another CAT Reporter. BD A’s trader or trading system subsequently modifies the price of the 2,000 share order routed to Exchange A. Is BD A required to report the modification of the 2,000 share order routed to Exchange A?
In Phase 2a, firm modifications of a previously routed order are not required to be reported to CAT if the destination to which the order was routed is a CAT Reporter. As a result, in the given example, the modification of the 2,000 share order sent to Exchange A would not be reportable by BD A, but would be reported to CAT by Exchange A. If the order had been routed to a foreign destination or other destination that is not a CAT Reporter, BD A would be required to report the modification to CAT.
- FAQE27. How should the affiliateFlag be populated when routing an order between IMIDs belonging to the same broker-dealer?
The affiliateFlag should be populated as ‘true’ when routing an order between IMIDs belonging to the same broker-dealer.
- FAQE26. Does Section 6.3(d)(ii) of the CAT NMS Plan, which sets forth the reporting requirements with regard to the “routing of an order,” apply to both internal and external routes?
Yes. Section 6.3(d)(ii) of the CAT NMS Plan applies to both internal and external routes. Specifically, when Section 6.3(d)(ii) refers to “the routing of an order,” it includes routing orders internally within an Industry Member and routing orders by an Industry Member externally to an exchange or another broker-dealer. FAQ E.1 describes in more detail the types of internal routes that must be reported to the CAT.
Yes. This number can contain any ASCII characters, except the specified file delimiters. The tapeTradeID contained in the CAT Trade event must the exact same as that contained in the TRF Report, including preceding zeros or spaces.