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Tuesday, February 18, 2025

Equity Trader Alert #2025 - 11
Nasdaq Announces Upcoming Self-Match Prevention Enhancements

Category:

  • New Functionality

Markets Impacted:

Contact Information:

Resources:

The Nasdaq Stock Market (Nasdaq), Nasdaq BX, and Nasdaq PSX will be introducing enhanced Self Match Prevention (SMP) functionality. The SMP enhancements provide updated matching logic, introduce two new matching levels, and introduce a new SMP strategy.

Matching level functionality

Currently, orders with different SMP levels may still have SMP activated as the incoming order dictates the matching level used. This functionality will be changed so that the level on both orders must match for SMP to be activated. The incoming order’s strategy will still dictate which strategy is used (Cancel Oldest, Cancel Newest, etc.).

“Affiliate” SMP Level

A new SMP level called “Affiliate” will be introduced to allow firms to activate SMP across member MPIDs and any MPIDs that a firm uses through a sponsored access provider. Firms wishing to utilize this functionality will need to contact Trading Services and complete an Affiliate ID Request Form to create an Affiliate ID to link together MPIDs in this arrangement.

“Match Any” SMP Level

A new SMP level called “Match Any” will be introduced to allow firms to have SMP activated if any of the existing activation levels match (MPID, ORG ID, Affiliate ID).

“Use Remover” strategy

A new SMP strategy called “Use Remover” will be introduced that will only invoke SMP as a liquidity adder and will defer to the incoming order’s strategy when activated. This strategy will never invoke SMP when it is applied to an incoming order. Please note: unless otherwise notified by customers, the exchange will automatically update port settings to “Use Remover” for customers who have ports without a SMP strategy if they also have ports under that MPID with a SMP strategy activated. This will retain current functionality where a resting order without a strategy may still have SMP activated by an incoming order with a strategy. Customers should contact Subscriber Services if they wish to change this functionality.

Please view the updated Self Match Prevention Factsheet for further information including examples of the new functionality.

The rollout will occur on an exchange-by-exchange basis on the following dates:

PSX: 3/17

BX: 3/24

Nasdaq: 4/7

Testing Opportunities:

Testing is currently available in the Nasdaq Testing Facility (NTF).

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Nasdaq (Nasdaq: NDAQ) is a leading global provider of trading, clearing, exchange technology, listing, information and public company services. Through its diverse portfolio of solutions, Nasdaq enables customers to plan, optimize and execute their business vision with confidence, using proven technologies that provide transparency and insight for navigating today's global capital markets. As the creator of the world's first electronic stock market, its technology powers more than 90 marketplaces in 50 countries, and 1 in 10 of the world's securities transactions. Nasdaq is home to approximately 3,900 total listings with a market value of approximately $13 trillion. To learn more, visit: business.nasdaq.com.

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