NYSE Texas Updates Trading Rules for Smoother Auctions
Published Date: 5/19/2025
Notice
Summary
NYSE Texas is rolling out a new Rule 7.35 to make auctions smoother and updating Rule 7.31 to add cool new order types like Imbalance Offset Orders and Q Orders. These changes affect traders and market makers by improving how trades happen, especially for certain Exchange Traded Products. The new rules kicked in right away on May 9, 2025, aiming to boost trading efficiency without extra costs.
Analyzed Economic Effects
6 provisions identified: 3 benefits, 2 costs, 1 mixed.
NYSE Texas Adopts Auction Framework
NYSE Texas adopted new Rule 7.35 to run multiple auctions (Early Open, Core Open, Closing, Trading Halt, and IPO Auctions) and to define auction processing, matching, and transition to continuous trading. The change became operative upon filing on May 9, 2025 and treats those auctions as single-priced opening/reopening/closing transactions under Rule 611(b)(3) of Regulation NMS.
Short-Sale Orders Handled in Auctions
During a Short Sale Period (per Rule 7.16(f)), sell-short market orders adjusted to a Permitted Price will be processed for auction pricing and ranked as Limit Orders (Priority 2--Display Orders) and will not be included in the Market Imbalance for auction pricing; sell-short orders included in Auction Imbalance Information will be adjusted to a Permitted Price as the NBB moves.
Imbalance Offset (IO) Orders Introduced
NYSE Texas added an Imbalance Offset (IO) Order type in Rule 7.31(c)(5). An IO Order is a limit order that may only be accepted during a trading halt or pause and may participate only in a Trading Halt Auction if it meets the Indicative Match Price and other specified conditions.
Q Orders Reserved for Market Makers
NYSE Texas added a Market Maker-specific Q Order in Rule 7.31(j). A Q Order is a limit order that must be submitted by a registered Market Maker, must display at least one round lot on entry, must be designated Day, and does not route. Q Orders submitted by non-Market-Maker Participants will be rejected.
Certain Orders Excluded From Auctions
NYSE Texas' rule changes state that Non-Displayed Limit Orders, Mid-Point Liquidity Orders, and Market Pegged Orders do not participate in auctions, and that Immediate-or-Cancel (IOC) designated Limit Orders are not eligible to participate in any auctions. Also, Auction-Only Orders not traded in the designated auction will be cancelled.
Trading Halt Auction Executions Not Reviewable
NYSE Texas amended Rule 7.10 to provide that executions resulting from a Trading Halt Auction are not eligible for a request to review as 'clearly erroneous' under Rule 7.10(b).
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