The New York Stock Exchange is pleased to announce a significant enhancement to the current handling of Market-on-Close and Limit-on-Close orders. This initiative is designed to attract stabilizing liquidity to listed issues with significant imbalances at the end of the trading day while ensuring automatic compliance with Exchange rules governing submission of MOC/LOC orders.
Currently, Regulatory imbalances are posted at 3:40 PM, with an update at 3:50 PM. The NYSE offers an optional service that rejects every order entered after 3:40 PM with an MOC or LOC instruction attached, whether the order is offsetting a published imbalance or adding to it. This optional service is being eliminated in order to provide a new service to all customers.
Beginning Monday, Dec. 22, 2008, the Exchange will accept only those MOC and LOC orders entered after 3:40 PM that are on the contra side of a published regulatory imbalance of 50,000 shares or greater and will reject all MOC/LOC orders that attempt to join the same side of the published imbalance. NYSE systems will also begin rejecting all cancel requests sent after 3:40 PM for any previously entered MOC and LOC order, including orders that were entered to offset a previously published imbalance.
In preparation for this order enhancement, on the weekend prior to the Dec. 22 launch, the Exchange will disable the current MOC and LOC blocks that member firms had requested to be added to their individual mnemonic profiles. To summarize the change:
Current Functionality of MOC and LOC Service
• On an individual, client-designated mnemonic basis, all MOC and LOC orders entered after 3:40 PM are rejected back to the user.
• No capability to allow offsetting interest into the Exchange systems with this service activated.
• No capability to reject cancel requests entered after 3:40 PM of previously entered MOC and LOC orders.
• Exchange will allow offsetting MOC and LOC orders to be entered after 3:40 PM in issues where an imbalance of 50,000 shares or greater has been published.
• Exchange will block all MOC and LOC orders that join the same side of a published imbalance of 50,000 shares or greater.
• Exchange will reject all orders entered after 3:40 PM in issues where no imbalance is published.
• Exchange will reject all post-3:40 PM cancel requests for MOC and LOC orders entered prior to 3:40 PM or after 3:40 PM that were entered to offset previously published imbalances.
• All MOC and LOC order acceptance and rejection will be based independently on the two published regulatory imbalances, at 3:40 and 3:50 PM, respectively.
The NYSE expects that this change will help further strengthen the NYSE’s current leadership in providing customers with the largest pool of liquidity and the most accurate price discovery at the close, one of the most critical times of the trading day.
If you have any questions regarding this order enhancement, please contact your Relationship Manager.
Technical Addendum to the MOC Client Notice
Category: Product News