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Thursday, August 12, 2010

Equity Technical Update #2010 - 13
NASDAQ OMX Announces Update Regarding Short Sale Exempt Codes

Markets Impacted:

Contact Information:

What you need to know:

  • Effective November 10, 2010, The NASDAQ Stock Market® (NASDAQ®), NASDAQ OMX BXSM (BXSM) and NASDAQ OMX PSXSM (PSXSM) will begin accepting inbound orders marked as Short Sale Exempt through all order entry protocols.
  • Testing Reminder: NASDAQ OMX will offer testing for Short Sale Exempt Codes for NASDAQ, BX and PSX on Saturday, October 23, 2010. Firms should email NASDAQ OMX Trading Services to register for the test.

What is changing?

The Securities and Exchange Commission (SEC) amended Regulation SHO effective May 10, 2010 (Release 34-61595), to provide for the ability to mark qualifying short sale orders as “short exempt.”

Effective November 10, 2010, NASDAQ, BX and PSX will reintroduce support of the Short Sale Exempt codes through all order entry protocols, including OUCH, RASHport, FIX, QIX, CTCI and FLITE.

What short sale exempt reason codes will be available for use?

Due to the amendments to Regulation SHO, short sale exempt values supported prior to the elimination of Rule 10a-1 in October 2007 will be reintroduced and supported by NASDAQ, BX and PSX. The table below depicts the short exempt values that may be used:

Sell Short reasons will be accepted on all trades:
OUCH (all versions)
RASHport
FIX (all versions)
QIX
CTCI
FLITE
Short Sale Exempt
“E” – Short sale exempt
“E” – Short sale exempt
Tag 54
“6” - Short sale exempt
“SX” – Short sale exempt
“SSX” – Short sale exempt
“SSHRT EXEMPT” = short sale exempt
Tag 54
“6” - Short sale exempt

What do I need to do to be ready for these changes?

Refer to the NASDAQ OMX® technical specifications for further information on preparing for the changes.

Will NASDAQ OMX offer testing opportunities?

NASDAQ OMX will offer testing for Short Sale Exempt Codes for NASDAQ, BX and PSX on Saturday, October 23, 2010. Firms should email NASDAQ OMX Trading Services to register for the test.

Where can I find additional information?


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