CHICAGO--(BUSINESS WIRE)--Today the Chicago Stock Exchange (CHX) announced plans to introduce its auction products – Participant-initiated on-demand SNAPSM Auctions as well as Exchange-Initiated SNAP Auctions – starting May 13, 2016.1
John Kerin, CHX President and Chief Executive Officer, said, “We believe that SNAP Auctions will be the safest and most effective mechanism to seek block size execution at the NBBO Midpoint by using a Midpoint Pegged Auction Only order. Exchange-initiated SNAP Auctions will assure that a SNAP Auction is called when sufficient size exists – at the NBBO Midpoint or another price – to execute block size. Among other things, using SNAP Auctions will provide superior protection against information leakage.”
CHX Director of Sales Mark O’Connor offered that SNAP Auctions have attracted support from a variety of fully independent market structure experts including Georgetown University professor James Angel; founder & CEO of KOR Group LLC Chris Nagy; Haim Bodek, Managing Principal at Decimus Capital Markets, LLC; and the Federal Reserve Bank of Chicago.
Steven Givot, CHX Senior Vice President for Strategy and Product Management, added, “The buy side has been victimized by several broker dealers operating ATSs or dark pools. The substantial fines levied by the SEC resulted from allegations that these firms placed their own best interests ahead of their customers’ interests.
“CHX, as a national securities exchange, does not have the same conflicts of interest that the operator of an ATS or dark pool has. We do no proprietary trading. We are obligated by law to treat customers equally. We are obligated by rule to maintain the confidentiality of order and trading information. All of our rules are published for public comment, approved by the SEC, and fully transparent. For these and other reasons, CHX offers a safer place for buy side customers to seek block size liquidity in an environment where they do not have to worry whether the trading venue will put its own interests ahead of the interests of its customer.”
References:
Additional information regarding SNAP Auctions can be found at: http://www.chx.com/snap/
The Chicago Fed Letter 343 can be found at:
https://www.chicagofed.org/publications/chicago-fed-letter/2015/343
About CHX:
CHX is a full-service national securities exchange with robust, high-performance technology. CHX offers trading in more than 8,300 listed securities and offers a compact set of order types designed to provide a level playing field for all order senders. More at www.chx.com
1 Subject to SEC approval.
