On March 17, the Securities and Exchange Commission approved amendments to the information barrier rule of the International Securities Exchange, LLC (ISE). As reported in the October 17, 2014, edition of the Corporate & Financial Weekly Digest, amendments to ISE Rule 810 will permit certain information to flow to a firm’s electronic access member (EAM) unit, which effects transactions on behalf of customers on an agency basis, from its affiliated primary market maker (PMM) and competitive market maker (CMM) units. Specifically, as amended Rule 810 will allow EAMs to know where and at what price their affiliated market makers are either quoting or have orders on the order book and to use such information to influence routing decisions.
The SEC also approved amendments to ISE Rule 717. As amended, Rule 717 will allow EAM unit orders to interact with orders of its affiliated PMM and CMM units within one second, provided that: (1) the customer order is marketable when routed; (2) the EAM unit is not handling the affiliated market maker quote/order; and (3) the affiliated market maker quote/order is entered into the ISE system prior to the customer’s order.
Notice of SEC’s order of approval is available here.