The Exchange has sought to reduce the exposure time specified within the Facilitation Order mechanism to more closely align with the standards in practice on the floor-based U.S. options markets. Until now, ISE rules required that an Electronic Access Member (EAM) wishing to take the opposite side of a customer order through this liquidity-enhancing functionality wait 30 seconds before trade execution occurred.
"This revision is part of our ongoing effort to improve the efficiency of our trading system and will permit our member firms to provide better service with respect to customer orders," said Gary Katz, ISE's Chief Operating Officer. "Customers will now be exposed to even greater levels of liquidity at the ISE, while at the same time exposing their orders for price improvement."
ISE was the first of the five U.S. options exchanges to codify a facilitation mechanism in its rules, providing firms with assurance that they could enhance liquidity for customer orders through this process.
The facilitation mechanism has been in place at ISE since the launch of trading in May 2000. However, ISE market participants have found the 30-second exposure requirement in ISE's electronic environment to be too lengthy when compared to the floor-based markets, where there is no minimum exposure time requirement.
