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Request for SIP Odd Lot Quotation Proposals

Summary

SIFMA provided comments to Nasdaq Unlisted Trading Privileges Plan Participants and Consolidated Quotation Plan Participants’ proposal for the securities information processors (SIPs) to disseminate certain odd lot quotation data as ancillary information on the SIP data feeds. Under the Proposal, the SIPs would provide the price and number of shares of the best odd lot bid and offer overall and on an exchange-by-exchange basis. The overall best odd lot bid and offer fields would only update in response to changes in the national best bid and national best offer. The SIPs would provide the best odd lot quotations at each exchange only if it was better than the NBBO, and would continue to exclude other odd lot quotations priced better than the NBBO.

PDF

Submitted To

Nasdaq Unlisted Trading Privileges Plan Participants, Consolidated Quotation Plan Participants

Submitted By

SIFMA

Related Committee(s)

  • Equity Markets and Trading Committee

Date

26

November

2019

Excerpt

November 26, 2019

Nasdaq Unlisted Trading Privileges Plan Participants
Consolidated Quotation Plan Participants

Re: CTA and UTP/CQ Plans Odd Lots Proposal

Dear SIP Operating Committees:

The Securities Industry and Financial Markets Association (“SIFMA”)1 submits this letter in response to your proposal for the securities information processors (“SIPs”) to disseminate certain odd lot quotation data as ancillary information on the SIP data feeds (the “Proposal”). Under the Proposal, the SIPs would provide the price and number of shares of the best odd lot bid and offer overall and on an exchange-by-exchange basis. The overall best odd lot bid and offer fields would only update in response to changes in the national best bid and national best offer (“NBBO”). The SIPs would provide the best odd lot quotations at each exchange only if it was better than the NBBO, and would continue to exclude other odd lot quotations priced better than the NBBO.

Summary of SIFMA’s views and recommendations

  • Odd lot information becomes more important with the increase in odd lot trades and volume, particularly for select high-priced (e.g., Amazon, Apple, Google) stocks. Re-defining the protected round lot size for select high-priced stocks may reduce some of the need for including odd lot quotations on the SIPs.
  • We generally support adding odd lot quotations to the SIPs to provide transparency and to reduce the informational disadvantage of firms unable or unwilling to purchase the exchanges’ proprietary feeds which already include odd lot quotations.
  • Because odd lot quotes to the SIPs should solely be for informational purposes at this initial stage, broker-dealers and SIP data purchasers should be able to opt out
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1 SIFMA is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s nearly 1 million employees, we advocate for legislation, regulation and business policy, affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.

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