To align with the industry initiative outlined in Guidelines for the Simplified Execution Source Code, FIA Tech will be updating the available Execution Methods within the Rate Schedule tools - eModule and in-application Rate Schedule Builder - to reflect the simplified list of Execution Methods, as well as the updated definitions for available codes. These changes will be available in Docs as of September 30th, 2019.
Supported Values and Definitions
After September 30th, only the following Execution Methods below will be supported in newly created, or newly amended, electronic rate schedule in Docs. When rate schedules are added or modified after this date, system validation will prevent any codes other than those in the list below from being included on schedules, regardless of whether unsupported codes existed on previous schedules.
|C||Vendor-provided Platform billed by Executing Broker|
|G||Sponsored Access via Exchange API or FIX provided by Executing Broker|
|H||H Premium Algorithmic Trading Provider billed by Executing Broker|
|D||Other, including Other-provided Screen|
Changing Code Definitions
In addition to streamlining the available codes to those listed above, exchanges have opted to update the definitions of the following four codes. To support firms in distinguishing legacy codes from those using the new definitions, rate lines that have included the following four before Sept. 30th will take on the legacy code shown in parentheses in the first column below, when downloaded or pulled via REST API. These legacy codes will not be supported on newly created or amended schedules, and firms will need to update rate lines to only include the supported list of codes provided above on any rate schedules update or new uploads.
|Code (Legacy Code After Sept. 30th)||Legacy Description||New Description|
|C (LC)||FCM-provided screen||Vendor-provided Platform billed by Executing Broker|
|G (LG)||FCM API or FIX||Sponsored Access via Exchange API or FIX provided by Executing Broker|
|H (LH)||Algo Engine||H Premium Algorithmic Trading Provider billed by Executing Broker|
|D (LD)||Other-provided screen||Other, including Other-provided Screen|
No changes are being required to remove or update unsupported Execution Methods on rate schedules, however trades tagged with new Execution Methods will not match to rate lines with corresponding legacy codes. In order to have trades match to new codes, rate schedules will need to be amended to include the proper current value. Firms will need to update rate schedules to remove/update lines containing unsupported execution methods when amending existing schedules, or creating new schedules, in order to pass system validation. This validation will take place in both the eModule, as well as the In-Application Rate Schedule Builder, preventing schedules from being uploaded to either agreements or into the Rate Schedule Library if they include rate lines for any unsupported execution methods.
Schedules containing legacy Execution methods with changing definitions will need to be updated by firms prior to uploading into the system. Firms may perform these updates directly within the system via the Rate Schedule Builder - Bulk Edit Tools, allowing multiple rate lines within a single schedule to be amended through bulk action.
The eModule can also be used to make bulk updates to the execution method field.
Support for Pit Execution Methods
As noted in the list of Supported Values and Definitions, both Desk and Client Pit methods (X and Z) will continue to be supported for inclusion on new and amended Rate Schedules, however these values are not supported under the simplified scheme. FIA Tech intends to introduce validation against these two execution methods in the future, currently targeting November 2020. It is therefore recommended that firms phase out use of these execution methods throughout the coming year.
The following information regarding upcoming changes on various exchanges is provided for informational purposes only, and firms should reach out to their representatives at the exchange in question.
|Date||November 17th, 2019|
|Update||Trades submitted without valid Execution Method will be rejected (https://www.cmegroup.com/notices/electronic-trading/2019/06/20190603.html#ilkmor)|
Impact on Downstream Systems
Details on the impact of changes to support the simplified list of Execution Method codes on the SOAP and REST API tools may be found here.
For brokerage management, the Atlantis platform will continue to reference codes and schedules in the same manner as took place before the introduction of the simplified Exchange Method list.
Brokerage Default Hierarchy
Additionally, with the introduction of the new execution methods, Atlantis will perform and enhanced matching process based on the Rate Schedule and Trade data. For any trades submitted with any of the Complex Electronic methods (C, D, G, H), the system will attempt to match as follows, taking into account standard Product, Group, and Exchange details:
- Match to rate lines with specified code - C, D, G, or H
- Match to rate lines with general Electronic code - Y
- Match to the designated "Default" rate line for a given product/group/exchange