Notice Date: July 23, 2020 To: Small Exchange Participants Notice Number: REG-2020-115 Subject: Self-Match Prevention Functionality
Small Exchange, Inc. (the “Exchange”) is reminding participants that the Exchange offers self-match prevention as a risk control. This functionality is intended to prevent the matching of orders with common ownership.
Participants choosing to utilize self-match prevention will send their Exchange-generated self-match identifier (also known as a “token”) with all their orders using FIX tag 2362. Two (2) orders on opposite sides of the market having that same token are prevented from matching by canceling one (1) or both of the orders. The participant has the option to cancel the aggressor order (i.e., last order received by the Matching Engine), the resting order, or both. This option is chosen by the participant in FIX tag 8000. The Exchange’s self-match prevention functionality also prevents self-matches of implied trades.
Irrespective of whether a participant uses the Exchange’s self-match prevention or implements its own functionality to limit instances of unintentional self-matches, the Exchange reminds participants that they must, pursuant to Exchange Rule 503, establish, maintain and administer reasonable supervisory procedures to ensure that the firm and its employees comply with all Exchange Rules, including Exchange Rule 605 (“Non-Competitive or Fictitious Transactions Prohibited”).