As announced in Direct Edge Trading Notice #12-53, EDGX Exchange (EDGX®) introduced the Retail Order Designation for Members that submit orders to EDGX on behalf of their retail customers. Effective today, Tuesday, April 16, 2013, EDGX is expanding the definition of Retail Orders to include riskless principal orders that satisfy the criteria of FINRA Rule 5320.03.
In addition, in EDGX’s initial rule filing on Retail Orders with the Securities and Exchange Commission (SEC) (SR-EDGX-2012-47), the Exchange stated that if a Member represents a Retail Order from another broker-dealer customer, the Member's written supervisory procedures must be reasonably designed to assure that the Retail Orders it receives from such broker-dealer customers meet the definition of a Retail Order. The Member must (i) obtain an annual written representation from each broker-dealer customer that sends it orders to be designated as Retail Orders that entry of such orders as Retail Orders will be in compliance with the requirements specified by the Exchange, and (ii) monitor whether its broker-dealer customer's Retail Order flow continues to meet the applicable requirements. To provide Members additional transparency, EDGX has incorporated this language into its revised attestation form and, pending filing with the SEC, will also incorporate it into footnote 4 of its fee schedule.
Accordingly, the Retail Order Attestation Form, which is required prior to Members submitting Retail Orders, has been updated to reflect the addition of riskless principal orders to the definition of Retail Orders and the Member’s supervisory requirement regarding broker-dealer customers.
More Information
- To begin designating Retail Orders, complete and submit the revised Retail Order Attestation Form to Direct Edge Member Services.
- Download the Retail Order Designation fact sheet.
- Refer to footnote 4 in the EDGX Fee Schedule.
