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MDP 3.0, is CME migrating to a new data comm protocol?

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It would be worth noting to to add to this discussion that the SEC market structure meeting on May 13th created some headway on the hotly debated topic of an uncompetitive market place of HFT's skimming price and abusing the maker-taker process. This is long overdue with all the manipulative order types that have been present since inception of Reg NMS in 2007 including Direct Edge's 'hide not slide', NASDQ's MPPO etc.

It's worth noting that NYSE's Arca seems to be leading the way where the pilot rule changes will be implemented on their Pillar platform to test the new market structure.


QUOTE
The proposed priority categories would be:
 Proposed Rule 7.36P(e)(1) would specify “Priority 1 – Market Orders,” which
provides that unexecuted Market Orders would have priority over all other sameside
orders with the same working price. This proposed priority is the same as
current Exchange priority rules under which resting Market Orders have priority
over other orders at the same price.22
Circumstances when an unexecuted Market
Order would be eligible to execute against an incoming contra-side order include
when a Market Order has exhausted all interest at the NBBO and is waiting for an
NBBO update before executing again, pursuant to Rule 7.31(a), or when a Market
Order is held unexecuted because it has reached a trading collar, pursuant to Rule
7.31(a)(3)(A). In such circumstances, the unexecuted Market Order(s) would
have priority over all other resting orders at that price.
 Proposed Rule 7.36P(e)(2) would specify “Priority 2 – Display Orders.” This
proposed priority category would replace the “Display Order Process.” As
proposed, non-marketable Limit Orders with a displayed working price would
have second priority. For an order that has a display price that differs from the

22 This priority is currently specified in Rule 7.16(f)(viii).
26
working price of the order, if the working price is not displayed, the order would
not be ranked Priority 2 at the working price.
 Proposed Rule 7.36P(e)(3) would specify “Priority 3 – Non-Display Orders.”
This priority category would be used in Pillar rules, rather than the “Working
Order Process.” As proposed, non-marketable Limit Orders for which the
working price is not displayed, including the reserve interest of Reserve Orders,
would have third priority.
 Proposed Rule 7.36P(e)(4) would specify “Priority 4 – Tracking Orders.” This
priority category would replace the “Tracking Order Process,” as discussed in
further detail below in connection with proposed Rule 7.37P. As proposed,
Tracking Orders would have fourth priority.
Proposed Rule 7.36P(f) would set forth that within each priority category, orders would
be ranked based on time priority.
 Proposed Rule 7.36P(f)(1) would provide that an order is assigned a working time
based on its original entry time, which is the time an order is first placed on the
NYSE Arca Book. This proposed process of assigning a working time to orders
is current functionality and is substantively the same as current references to the
“time of original order entry” found in several places in Rule 7.36. To provide
transparency in Exchange rules, the Exchange further proposes to include in
proposed Rule 7.36P(f) how the working time would be determined for orders
that are routed. As proposed:
27
o Proposed Rule 7.36P(f)(1)(A) would specify that an order that is fully
routed to an Away Market23 on arrival would not be assigned a working
time unless and until any unexecuted portion of the order returns to the
NYSE Arca Book. The Exchange notes that this is the current process for
assigning a working time to an order and proposes to include it in
Exchange rules to provide transparency regarding what is considered the
working time of an order that was fully routed on arrival.
o Proposed Rule 7.36P(f)(1)(B) would specify that for an order that is
partially routed to an Away Market on arrival, the portion that is not
routed would be assigned a working time. If any unexecuted portion of
the order returns to the NYSE Arca Book and joins any remaining resting
portion of the original order, the returned portion of the order would be
assigned the same working time as the resting portion of the order. If the
resting portion of the original order has already executed and any
unexecuted portion of the order returns to the NYSE Arca Book, the
returned portion of the order would be assigned a new working time. This
process for assigning a working time to partially routed orders is the same
as currently used by the Exchange. The Exchange proposes to include this
detail in Exchange rules to provide transparency regarding what is
considered the working time of an order.

23 The Exchange proposes Rule 1.1(ffP), which would define the term “Away Market.”
The proposed definition is based on the existing definition of “NOW Recipient,” which is
a term that the Exchange would not be using in Pillar. For Pillar, the proposed definition
of “Away Market” would reference the term “alternative trading system” instead of ECN.
28
 Proposed Rule 7.36P(f)(2) would provide that an order would be assigned a new
working time any time the working price of an order changes. This proposed rule
text would be based on the rule text in Rule 7.36(a)(3), without any substantive
differences. A change to the working price could be because of a User’s
instruction or because the order or modifier has a price that can change based on a
reference price, such as an MPL Order, which is priced based on the PBBO.
 Proposed Rule 7.36P(f)(3) would provide that an order would be assigned a new
working time if the size of the order increases and that an order would retain its
working time if the size of the order is decreased. This proposed rule text would
be based on rule text in the first and second sentences of Rule 7.36(a)(3), without
any substantive differences.
 Proposed Rule 7.36P(f)(4) would provide that an order retains its working time if
the order marking is changed from: (A) sell to sell short; (B) sell to sell short
exempt; (C) sell short to sell; (D) sell short to sell short exempt; (E) sell short
exempt to sell; and (F) sell short exempt to sell short. This rule text would use for
the Pillar trading platform rules the same rule text as in Rule 7.16(f)(viii), without
any substantive differences. The Exchange proposes to include the text from Rule
7.16(f)(viii) regarding order priority when changing order marking to Rule 7.36P
to consolidate ranking in a single rule.
Proposed Rule 7.36P(g) would specify that the Exchange would enforce ranking
restrictions applicable to specified order or modifier instructions. These order and modifier
instructions would be identified in proposed new Rules 7.31P and 7.44P, which the Exchange
will submit in a rule filing prior to implementing the Pillar trading platform.
29
In addition, the Exchange proposes a definition in Rule 1.1(aP) of NYSE Arca Book that
would be applicable to the Pillar rules. The proposed definition would differ from the current
definition of NYSE Arca Book in Rule 1.1(a) in that it would not include references to the terms
“Display Order Process,” “Working Order Process,” and “Tracking Order Process,” which as
discussed above, are terms that will not be used in Pillar. As proposed, new Rule 1.1(aP) would
provide that the term “NYSE Arca Book” refers to the NYSE Arca Marketplace’s electronic file
of orders, which contains all orders entered on the NYSE Arca Marketplace.
QUOTE

http://www.sec.gov/rules/sro/nysearca/2015/34-74951.pdf

https://www.nyse.com/pillar

It seems the CME's MDP 3.0 data changes that were announced prior to this meeting could be due to foresight knowledge on the upcoming order book/execution proposed changes. However that's just my conjectured opinion.

UPDATE 2-CFTC says CME directed to beef up 'spoofing' enforcement | Reuters

Also nice and timely is the case with the Flash Crash trader that every uncle Joe and aunt Millie knows about. The SEC and CME have their scape goat.

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